Tuesday, May 6, 2014

AAPL Apple Weekly Chart Price Hits 600

The Apple upside orgy, pumped by divvy's and buybacks, continues higher now tagging six hundo not seen since October 2012. Note the buying volume remains only one-half of the selling volume from late January. The short green lines at the right margin shows long and strong behavior so AAPL should remain lofty for a few weeks. The daily chart is negatively diverged so if you want to go in long now is not the time; price will pull back in the short-term. But the weekly above shows higher highs desired as May plays out and rolls into June.

The gap fill at 625 is an attractive upside target. Keystone's 80/20 rule says 8's typically lead to 2's so 580 should lead to 620. 598 should lead to 602. If 608 occurs that would lead to 612. Note the triangle pattern for this year. Using about 80 handles for the vertical side and a break out at 530 targets 610, bingo, right where price is at, 600-610.

So Apple is not play right now unless you are a nimble trader that wants to play the daily chart pull back with a very near term short play. Gun-ho long traders can buy the pull back and squeeze out some new highs during May. Price should peak over the next month or so in the 600-630 area and roll back over to the downside, perhaps seeking a sideways channel through 425-575 for the remainder of the year.

The power of buybacks is clearly illustrated above. Apple has a cash hoard to use but a huge number of companies, as evidenced last year and this year, are using the Fed's easy money and low rates to fund the buyback programs. This makes the rich richer, since they own stocks, and the Fed's money is not used to boost capital equipment purchases or employment as they are intended. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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