Trading AAPL: A double dose of technical analysis
A pair of videos appeared on the Web Tuesday that offer a two-part primer on how to trade Apple (AAPL) shares based on technical analysis — the science (or pseudoscience) of predicting what a stock is about to do based on what it did in the past.
If you're not familiar with such concepts as support, resistance, breakouts and Fibonacci retracements, you can learn a lot from each of them.
Unfortunately, the two videos offer conflicting advice. One says to sell Apple. The other shouts buy! buy! buy!
The more enlightening comes from The Market Club and is basically a promotional video for the company's trading tools. But in four minutes it swiftly demonstrates how to apply Elliot wave analysis and the Williams percent range to Apple's recent stock movements and suggests that the stock — which has enjoyed a 61 point (78%) run-up since Jan. 20 — may be ready for a pullback.
The more entertaining (or irritating, depending on your sensibilities) is tape of Tuesday's episode of Jim Cramer's Mad Money. Quoting extensively from his favorite technical analyst, Cramer argues that tech stocks in general are about to break out and recommends, in particular, buying Apple.
Cramer also offers several predictions about what Apple is going to do at the World Wide Developers Conference next week, some of which strike us as dubious. But advice from Jim Cramer, who famously described on tape to how he could manipulate the market for Apple when he ran a hedge fund, is always best taken with a grain of salt.
See the videos below the fold.
See also:
"Not well done and what his his prediction, do you know".
I think Allan needs to use a grammar checker before posting his comments.
Jon Stewart was right on in his dissection of Jim Cramer. Cramer is a fraud, and his misinformation now affects millions of viewers. We'd be in much better shape today if our mainstream media weren't a bunch of "pumpers" like CNBC.
I'm sorry but if you knew how to beat the market, why would you still have a day job telling others how to beat the market?
I think both analyses have value. I think there is technical resistance, but I think the forces building behind Apple are, well, irresistible.
The argument that's held Apple stock down – that the economy will kneecap Apple – has been proven wrong five ways from Sunday. That means a lot of infilling just to bring the stock back up to par, which IMHO is just about where it is.
In the meantime Apple hasn't been exactly sitting on its laurels, which lends credence to the prediction of yet another substantial move to the upside. Frankly, I wouldn't be surprised to see it hit an all-time high this year.
BTW, I'm personally in for the long haul, so these short term fluctuations really mean little to me other than an opportunity to add to my position at bargain prices.
I would venture to say that Apple is ready to break out due to the introduction of the iPhone 3.0 and the likelihood of a tri-band $99 ChiPhone. If Apple even introduces a $129-$149 8GB iPhone in the U.S. with a reduced network fees, it will practically kill the competition in that range. A return of a healthy Steve Jobs will add fuel to the fire. Apple is not ready for a pullback in share price at all. It will keep going to the $170 range within a few months. At around September, an updated 64GB iPod Touch should be ready for release. Most likely it will have an upgraded processor and a camera if not two. That will carry Apple's share price up till the Christmas holidays and the Mac desktop sales resurgence. Share price will be at $200 by January or February 2010.
I think Jon Stewart needs to write a script before he makes a presentation. Not well done and what his his prediction. do you know
Apple is definetly a buy, and given the improving economy the stock is a good buy. As discussed here, http://www.savingtoinvest.com/2009/06/apple-stock-soaring-new-iphone-and.html , there a lot more positives going for the stock than negatives. Buy the stock and hold on for a few years.