it is still weak, but I think it is at the bottom. yet, it will take time to get traders' confidence in this sock back.
I am agnostic on Apple's fundamentals, the valuation looks cheap, but the stock really is trading like a weak PoS. The S&P is near all-time highs, AAPL is just off its lows. On good up days for the S&P, AAPL trades flat or up a tad; on flat days for S&P, AAPL is often down. On bullish news, it rallies limply for a short while. On a whiff of bearish news, it falls big. This kind of weak divergence and bearishly-biased response to news is usually an indicator of further weakness to come. The only time I'd usually consider buying something that is in such a clear bearish trend would be when I see massive capitulation selling, marked by high volume, panic sentiment, and multiple big down bars on the daily chart. I don't see that yet in AAPL. So, even though AAPL looks cheap based on its historic earnings and balance sheet, as a trader I can't consider getting long while the stock acts so weak.
Don't know about the fundementals -- although their monopoly on the high end is clearly over -- but I could never get long an issue like this until one of two things happened: 1) As has been said massive capitulation; 2) or a significant base was put in and an upside breakout with reasonable price action following the breakout. Without one of those two elements I would feel as if I were botom fishing and I don't want to be in that bussines. Not saying people don't make money at it but I have no clue as to how to do it. As an aside my wife bought a Note II in November but it was simply too big for her hand and replaced it with a Nexus 4. When you can buy a 16GB Nexus 4 for $350 off contract the "The Times They-Are-A-Changin". I'm not suggesting the Apple franchise is shot but they have gone from a monoply position to being head on against both Samsung and Google in the carriage trade market. Former monoplies frequently press a bunch of bad buttons when they try to get that position back. They are better off simply accepting the new conditions and realize the old days are forever gone.
AAPL is trying its best to hold the yearly with higher lows. Capitulation is not necessary for a bottom, a good base many times can be as good. This one won't be easy because there's a lot of big money involved and massive games will be played. Unfortunately, the outcome of this bottom or not will probably be related to an earnings report or two via massive gaps. Time will tell but right now it looks like it has gas for some upside.
Just in case anybody is wondering, I'm still long. Think a surge to 440 is quite realistic in the short term.
So, I think I know why AAPL is surging right now absent any news. Markets are surging like crazy, DJI and INDU both at record levels. At this point, traders can't afford to miss out on the rally so they need to keep buying in. Bears are getting destroyed and even the most convinced are covering. If you are to buy in now after having missed much of this year's rally, you would naturally want to avoid the stocks already considered largely overbought and instead go for the ones that are oversold or didn't really rally. Thus, there's quite a bit of money moving into stocks like AAPL and MSFT. For AAPL, 438 is the critical level. If it can hold and close above that, the next serious test isn't until 448.
Forgot to post yesterday, but I'm out of AAPL now at 436. There wasn't momentum to breach 438 so now it's a coin toss and no longer a sure bet. Will watch today, but I'm confident there will be an opportunity to get it back at under 436 if I decide to go back in.
True but a base takes a long time to build, usually 2-3 months at least, often longer. And they can just as easily be congestion before a new leg down, rather than the start of a new bull market. I suspect AAPL is now in a trading range 420 to 480ish, and will stay there until both bulls and bears get frustrated and whipsawed for long enough to lose interest. Only then is any bull trend likely to emerge IMO. And there's always the chance that fundies fall apart under increasing competition, and the next major leg is down, not up.