Last week I posted my technical read on AAPL and got a ton of negative feedback. That’s fine, I’m a big boy, I can take it. My price target was extreamly bearish, so that gets the bulls panties in a bunch, so to speak. All I am saying here, is the technicals are suggesting sideways at best and likely a move into the 90s.
Let me start with why I see ZERO reason to own AAPL here.
- OVERHEAD SUPPLY.
- DECLINING 50DMA
- Below a FLAT 200DMA
These are all reasons to move on to other opportunities or to cash. I am not saying short it , although risk reward is good at this level, and it’s still has a ton of bulls, which makes it nice and contrarian trade that can unwind quickly. What I am saying is there really isn’t a reason to be putting money to risk on this one, at the very least it will trade sideways for a while.
When you have 6 months of buyers overhead (overhead supply) that are now underwater in their buys, they want out. So as the stock rises back to at or near that level, those guys and gals are trying to liquidate out of a losing trade. That will keep the price down for a while. If the price starts to move lower from here, which I believe it will, those guys become bigger losers and get even more panicked. They start selling and demand is dried up. It just sets up further decline.
At the currrent point in time, I would become more interested in AAPL as a long, if we could trade and hold in the Overhead supply zone. In other words, the current resistance proves to be support. (see chart )
I just currently don’t see that happening soon, so why sit, wait and hope on a stock that is range bound at best Better to be in risk free cash don’t you think?
I will admit that the stock has currently held up well, but another red flag for me is Goldman upgrade. Shouldn’t you be buying upgrades? That means the smart analysts at the banks think it is going higher and they do this for a living, so isn’t it a buy? Well I’ll leave that up to you, but Goldman is in the business of making money. They upgrade stocks so that they have someone to sell to, and they downgrade stocks so they have someone to buy from. There is absolutely nothing in the price action at this point it time, to suggest a $163 target, I don’t care what the con artists at Goldman say.
I’ll let you decide.