Registered User
Joined: 11/1/2005
Posts: 5
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Any opinions on what price AAPL starts to pull back. 62.50 anybody?
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Registered User
Joined: 12/19/2004
Posts: 457
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AAPL is indeed an interesting chart.
I had been holding puts on AAPL since May. I decided to close out the position yesterday morning, with Bernake ready to testify before congress, and AAPL reporting this week. It looked as if AAPL could rally near term to 57, before trending lower.
Looks like my put sale was a good move, given the run-up today.
Ultimately, I think the rally is short lived. On the weekly, AAPL is in a strong downtrend and deeply oversold. It had a typical counter-trend rally to the 21 week MA. The daily shows a not unusual move to the upper Bollinger Band, an ideal place for resistance to form.
This level is also the 50% retracement of the entire decline from May--another ideal place for resistance to form. The fact these all converge at similar levels gives me greater confidence that they will hold.
The broad market is weighing in the risks of a slowing economy. I don't care what AAPL's current numbers are, if growth slows, AAPL's profits will slow with it.
Given the institutional sponsorship, expect selling to resume, if not tomorrow, then in the next few weeks, particularly if the market continues to dive. AAPL cannot buck the macro trend forever.
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