TIME TO CATCH THE FALLING APPLE
As I was stretching my fingers to prepare for typing this post, I was wholeheartedly prepared to issue a diabolically negative report on AAPL, warning of utter catastrophe and suffering over the long-term for shareholders. In reviewing the long-term price action for AAPL, however, I don't feel that the long-term picture presents enough information to make any concrete determinations of the bullish or bearish nature. There simply isn't enough information to rely on at this point.
I can, however, take it one step at a time in presenting a short and intermediate term view of AAPL.
First, before the tomatoes come flying onto the stage accompanied by a symphony of jeers, a little history. I will admit to having a bias against companies like AAPL. What I mean by "companies like AAPL" is popular investments with cult like followings. These types of investments invariably end up harming investors because emotions take control of the mental cockpit as opposed to logical analysis. The emotional reaction is further reinforced by group think that is constantly amplified by positive articles, descriptions and experiences with respect to the investment. It simply becomes a recipe for bad decision making.
AAPL will not be immune to this to cacophony of sheepish mental disaster. When the ship begins sinking, as it inevitably will, you will see fluffy white coats and bright pink ears scattered all throughout the investing seas. If I can supply a life vest to just one would be victim, my job is done.
Over the short to intermediate term, my interest is in demonstrating to readers the risks and potential rewards in AAPL based on price analysis. As an example, in July, following a perceived disappointment in earnings with the stock trading in the 570 range, I said that it was a buying opportunity and the stock would be trading at 700+. More recently, I warned of the fact that AAPL would likely trade in the 520-550 range when the stock was trading above 600 just a few weeks ago.
Now that AAPL has fallen into my downside window, the opportunity has shifted. Please click the chart below for a detailed explanation:
AAPL
