Sunday, May 17, 2015

AAPL Apple Weekly Chart Overbot Negative Divergence Price Extended

AAPL is an often requested for charts and technical analysis. The big wig hedge fund and other investors reported their quarterly holdings on Friday evening and interestingly, the so-called smart money is either holding steady or selling off their Apple positions. Of course Joe Sixpack, caught up in the daily media hype for AAPL, is serving as the bagholder taking the shares. The maroon lines created a top in late February but the MACD line and histogram remained long and strong indicating that price would recover after a spankdown, which it did. The April price high comes with neggie d across all indicators (red lines) so a smack down is expected and occurs.

Price is trying to hold the trend line but remains far above the moving averages requireing a mean reversion lower. AAPL is not attractive from the long side and instead is a far better stock to potentially short on bounces. The only fly in the ointment for Apple bears is that the monthly chart, although negatively diverged, displays a higher MACD line so price may want to come up for one more look at the highs in June or July. However, the upside is likely extremely limited here on out. If you enjoyed long term profits on AAPL, cash out and put the money elsewhere or simply hold it in cash to guard against a major multi-year top in the stock market that is likely playing out over the coming weeks and couple or few months.

AAPL is expected to top out and roll over call it sideways to sideways lower moving forward. A move back above 130 will likely provide a great shorting opportunity. The sneaky money flow indicator over the last month is long and strong hinting that price may try to move back to 130. Overall, do not add to any Apple long position and quite the contrary begin trimming it back in earnest while contemplating shorts on any bounces. AAPL is not an attractive long play going forward. One year from now, AAPL will likely be under 100 perhaps under 90 which is a -20% to -30% haircut off current prices. 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.

Note Added 8:10 AM EST on Tuesday morning, 5/19/15: Activist investor Carl Icahn says AAPL should be priced at 240 about double the current prices. He cites an Apple television and Apple car products in the future so AAPL jumps +1.1% on 5/18/15 to 130.19. Apple says this morning that the television concept was abandoned and instead the focus is on a set-top box product. Obviously, CEO Tim Cook is not keeping Icahn in the loop.

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