AAPL - Sector: Technology - Industry: Computer Hardware

[ScottishTrader]

Hi all,

am pretty new here, but wanted to post this to get some feedback.  AAPL has been a favourite of mine for a little while now (about 6 months) and while it has seen some amazing runs, I never really managed to make much money on it (got burned badly by the April dump).  Which is a shame, as a LOT of people have made a LOT of money on it over the last year.  I have followed the company for a long time before this and am a firm believer in their products, philosophy, and long term prospects.  It's just the short term I'm not so good at.

I put together a little chart, but am no TAer really, and was hoping to get some feedback on it.  I estimated the trendlines that I saw, and from what I can tell, it looks like we are approaching support of quite a sharp ascending channel.  My hunch is that it should reverse off this in the next few days, and if previous reversals have been anything to go by, quite nicely too.  While volume isn't quite drying up, this is a pretty large cap stock with a lot of interest, so I wouldn't expect it to, though it is about as low as it has been in the last 3-6 months.

My main questions are 1) whether these trendlines and analysis are reliable, and 2) having sold out of my position at a bit over 47, does anyone else think this might be a good timew to get back in?

Any comments would be great.

Cheers!  

[nextmove]

OK, first of all don´t take me for a TA-guru - I´m just a wannabe

FWIK -
1. There are NO reliable TA indicators - but used the right way they do  improve our chances quite a bit.
2. The trendlines are there for anyone to see. 
3. The pennant formation indicates a that the trend should continue
4. Last candle is a doji - (reversal candle), and it is centered almost exactly at 50% of the flagpole.

Entering at 45,74 with profit target at 51 and stoploss at 44,90 gives us a risk/reward of 0,16. I like the trade setup and the signs are bullish.
Feedback i s appreciated

[ScottishTrader]

Thanks very much for your comments, nextmove. 

I agree with your comments, and see AAPL rebounding in the very near future.  Thanks for the information on targets and stop-losses, they are very much appreciated, thought I am wondering how you calculate those???

Generally I am very bullish on this stock, they have seen increasinng market share gains in their computer sales due to the iPod 'halo' effect, especially since Q1 '05, their dominance in the online music and portable mp3 markets (70-80% share), and the expectation of major new product releases next month to fill the gap before they switch to Intel processors next year.  Also expected in the very near future is the release of the iTunes mobile phone, in conjunction with Motorola which, when released should also boost the share price.  AAPL has been trading at all time highs in recent weeks, and with Windows viruses making a lot of headlines in recent weeks, OS X is starting to be seen as a very strong alternative.

They have been consistently blowing their earnings estimates out of the water, and have been quite conservative in their forward projections.  With the back to school season in full swing, I expect them to do the same next month.  While Wall Street is aware of this, and factors this into the price (some say they are significantly overvalued), they still consistently beat analysts estimates too.

I wouldn't be surprised to see a near-term bounce, followed by a limited retracement, and to see them trading in the 50s next month.

Cheers!

[ScottishTrader]

Hi all,

I know that this stock is probably way out of the price range of most people trading here, and is not exactly suitable for short term position trading, but I wanted to post this, as I think AAPL is about to make a major move, and the chart is nothing less than astounding

I have been following AAPL for quite some time, but pulled out of my position about 6 weeks ago, right around the time I started trading on 3SOF, as I believed that my money would be better put to use on short term position trades.  I think that I may have been wrong.  My closing position was at $46, where AAPL had temporarily consolidated.  It is now trading at all time highs of $54.  That is over a 17% return in 6 weeks, which is not bad by any standards.  And I believe things are going to get a whole lot better.

There is a huge amount of fundamental analysis available, but just recent news items are worthy of note:

http://www.appleinsider.com/article.php?id=1302

As Wall Street pays particular attention to iPod sales, topping 10 million units (even if they are lower cost nano's) is HUGE, especially considering UBS had been estimating earnings based on 8.3 million.    As the article says, consensus EPS estimates are 45 cents, but this could add another 10 cents per share!!  Consider that Apple has blown analysts estimates out of the water for the last several quarters, and EPS for last quarter was 36 cents, before that 31 cents, things are really moving here.  UBS currently have a price target of $64, which I think can be easily reached, and represents a further 18.5% on current prices.

In addition to this, Apple WILL release a newly updated iPod video this quarter - just in time for Christmas season, as well as new pro-level Power Macs and Powerbooks (both highly anticipated, and do believe me when I say there are a HUGE amount of users just waiting for these product announcements to buy).

The computer segment is underestimated, and prices have been discounted somewhat because of concerns with their switch to Intel, but I think wee shall see major growth in computer sales in the next year as this transition initiates.

Anyway, looking at the charts, the 2 year chart shows what is simply an amazing growth story, probably known by all - over 500% growth since the beginning of 2004 - no mean feat for a major blue chip tech stock, when compared to any of its rivals (just have a look at DELL, HPQ, MSFT etc.)
The 6 month chart is equally impressive - AAPL has been in a sharp ascending channel since the last earnings report in July - gaining 35% since its breakaway gap from those earnings.  If previous earnings action is anything to go by, we could see even more impressive movement in the near future.  One word of warning though - I was caught out by the April earnings, which were also stellar, but resulted in a major gap down, however, I believe institutional investor sentiment has changed in their favour since then, and the last few quarters earnings demonstrate a company that has increased revenues substantially, and can continue to grow.

Year end earnings are out on Oct 11th, and AAPL should make a solid run up till then - I would expect to see it breaking all time highs.  While I cannot be sure it may not pull back on earnings, I am very confident that they will outperform even the more optimistic analysts estimates, and we should see a corresponding price movement.

Needless to say I am very bullish on AAPL, and while this should probably be put into long term picks, I will leave it here as I wouldn't be surprised to see it gain 10% in the next week.

Here are the charts, and comments much appreciated.

Happy trading, the Scotsman

PS. I am back in today at $54

[usedcasting]

What's not to love about this company. Always wanted in and always felt like the boat was long gone. Had a spare position available today and I have jumped aboard.

Good trading all

uc

[LuckyFish]

We, in the San Francisco Bay Area, home to AAPL love this company too. Just fyi, AAPL was picked by gorillatrades back on 9/1 at around $47.  I jumped in on their rec, because they were having a big conference/introducing the nano etc. Gorilla trades set their 1st target at $51 and their 2nd target at $62.  1st target has been acheived, and I look forward to seeing AAPL hit the 2nd target.  BTW, if you haven't seen the nano, it's pretty awesome, and I can understand that AAPL fans would trade in their regular ipods for the nano.

I hope that you all get to make some $$ on the ride up to earnings set for 10/11 I believe.
Brigitte

[ScottishTrader]

true, but keep an eye out for big product announcements this month, including another new iPod, as I mentioned.  The buy has been on for the last 6 months, and if I had known what I was doing at the time, I would have held at least some of my postion that I bought at 42 and at 38 back then.  Holding is good, but sometimes it is hard

Anyway, we saw good movement today, approaching all-time highs once again, however the 40 cents or so I gained only paid for my trading fees   Man this stock iis expensive.

But no worries, I don't expect to make my previous mistakes.  Beyond a pullback below the ascending price channel, I will be very happy holding on to this until the new year.  We are going to see big things this quarter and next, methinks.

And about time we had a proper AAPL thread here too

[ScottishTrader]

wow, AAPL hit something hard up there and is falling back fast.

I have to addmit that, contrary to my best intentions, I sold out this morning around 4.80.  Didn't make anything, but wanted to free up some capital for another trade on one of David's picks.  Not sure if I like the look of this, but might be a good time for some bottom fishing late today or tomorrow.

This drop could be due to this news:

http://biz.yahoo.com/iw/051004/097018.html

although the fact that so many companies are being sued seems a bit crazy.  Then again they are almost all down today, except Forgent, unsurprisingly, which spiked 6% on the news.

Make of it what you will, I'm looking to free up some cash elsewhere and get back in a little lower, possible tomorrow.  Everything should be fine, as long as we stay in the channel.

[ScottishTrader]

We saw a bit of a pull-back today, but also saw new all-time highs as well    Maybe right now they were a little too much for AAPL.  This could be the beginning of a short term retrace back towards support, as we have seen before, but I doubt it will last long, and will be blowing current price levels out of the water before we know it.

There are 2 things that assure this, a double whammy coming next week:

1. Earnings on 11th October - Back to school quarter is always good, and an iBook is on every school and college kids must have list,  and with iPod Nano sales in the last month rocketing, there is no question that they will destroy their very conservative quarterly guidance.  The only chink is the Pro end (Powerbooks/Power Macs) which generally are slow over the summer, and both are due an update with announcements in the wings.  But beating iPod sales is what the Street is concerned with, and they may show sales of 10 milion this quarter.  That's DOUBLE last quarter's iPod sales

2.  Apple are organising a special event 12th October, the day after earnings, at which they will almost certainly debut the iPod video.  This (and/or the nano) is gonna be on everyone's christmas wish list and they are expecting to sell 3 million+ iPods a month till Christmas.  That's HUGE.  Hopefully we may also see new Power Macs and PowerBooks at the same time or soon after.  These are both thought tto be significant upgrades, and should sell very well as the last PowerPC version of the pro line until the Intel switch.

see

http://www.appleinsider.com/article.php?id=1304
http://www.appleinsider.com/article.php?id=1305

for details.

Finally, here's the chart.  I may have sold today, but I got lucky with the pull-back and get another chance to get back in

[ScottishTrader]

okay, I haven't posted here since last week, and thought I should drop a quick line as earnings are out tomorrow afternoon, with the "special announcement" the day after.

To be honest, I just don't know how to call this one.  Technically, AAPL did something totally unexpected and broke out of its ascending channel to the downside.  Now that in and of itself is not a good thing, and normally I would listen to this as a signal, but I just can't be sure with AAPL, and I am so tempted to go for an earnings run anyway.

I've been burnt by one earnigns sell-off in April, and at that time AAPL was also running high - in fact no-one could believe that the market took it the way they did.  This could easily happen again.  The only thing that makes me think against this is that the MMs love this stock, and the price action over the last few days just doesn't fly with what's expected.  Also, there has been institutional buying into the sell off these last days.  They could easily be shaking out jittery hands for the aftermarket jump tomorrow.

But I really can't tell.  Personally, I think the earnings and announcement will be great, and thee price will blow right through recent all-time highs, but that could easily be more down to my belief in the company than my belief in the market.

This is always the problem.  As david says, the market is always right, its just a bit fickle sometimes 

I'll post here tomorrow if I decide to buy in.

Here's the chart for today

[ScottishTrader]

Well, AAPL has been holding up today, and while it is definitely a gamble as to how the market will respond to earnings and tomorrow's product announcement, I don't want to miss it.

So I'm in at 51.30, lets see how this one rolls

[lbotez]

Wow, did AAPL tank in AH!

Maybe there will be a rally after their new products are shown off.

[ScottishTrader]

Yep, Ugly 

Didn't like that at all, and it happened in literally 2 minutes, too 

But that's the way it rolls with Apple, shoulda learned my lesson from the spring, and the technical indicators didn't bode well either, but I put my money in, and that's what I get.  Hopefully tomorrow should give it a good boost, esp as itt looks lik it could be a new video iPod after all (at least according to ThinkSecret  )  Basically, I won't ocnsider selling unless I get a clear indication that it is heading below $45.  I've wanted to stick a bit of money somewhere longer term, so maybe I'll do it with AAPL and ride it till Christmas - the forward earnings looked pretty good, and the current price does not factor .49 per share in, thats for sure.

Still not a happy camper, went in because I believed the story, and probably against my better judgement.  But I do think shares may be a steal tomorrow morning as a longer term pick

[Melf Elf]

Yep, Ugly 

Didn't like that at all, and it happened in literally 2 minutes, too 

But that's the way it rolls with Apple, shoulda learned my lesson from the spring, and the technical indicators didn't bode well either,

Scotsman,

You had a good read on the technicals before the selloff.

Per our MACD discussion in the DNDN folder, you mentioned that the technical indictors didn't bode well.  Take a look at what the MACD was doing on AAPL when the stock made its closing high for the move on October 3

It's similar to what we discussed yesterday about the MACD on DNDN on October 3, only in AAPL's case, the MACD was completing the Right Shoulder of a H&S top at the October 3 high. The  MACD ticked down from below its declining signal line on October 4, then MACD broke the neckline on October 5, which was the second technical signal that the stock could be in trouble.

AAPL subsequently broke an up trendline off the August 5 low that had 5 hits to it, then AAPL dropped quickly to its 50 DMA on the earnings news.

Using the "Pivot Day"  low (October 3) of 53.68 as a sell or as a sell short signal, the drop to the 50DMA or to the 47.87 low was a nice trade.

It's tricky and can be dangerous, though, shorting stocks that are in an uptrend like AAPL is.  If anyone took the short trade at 53.68 and didn't cover it, the trade has come back in his face.  AAPL closed Friday at 54.00, putting the short trade under water.

The fact that the MACD already had completed a H&S top and already had begun moving down well ahead of the price of the stock was a nice "early warning signal."  When AAPL broke the TRIPLE validated up trendline ahead of earnings, I view that as a chart confirmation of the "early warning" signals that the MACD was giving us. 

[Melf Elf]

Here's the AAPL chart with the "Sell Pivot," the subsequent trendline break, the drop to the 50DMA on earnings, etc. 

Sorry to post it separately from the MACD, but for viewing purposes, they don't show up clearly if I post them together.

Interesting candle for AAPL on Friday: it's a near-perfect Bearish Doji Star Hangman, but it's only bearish with downside confirmation in price.

If you want to scroll back up and look at the MACD, it's way out of postion with reference to its signal line, so if AAPL scores a new high here, the MACD will show a bearish divergence and a non-confirmation of the new price high.  MACD probably won't even get back to its declining signal line unless AAPL makes a new high, and keeps going higher.

That said, as I've mentioned in other threads, stocks like AAPL that are in powerful uptrends will look like this on the technical indictors.  Yes, we got a selloff in AAPL after the MACD example in the last post, but look how quickly the stock recovered!  It's back to 54.00.

So be careful about shorting stocks that are in a strong uptrend.  AAPL has been the bane of short sellers' existence.  They have gotten squeezed in it constantly if they didn't "take what's given" on the short-term sell signals.  "Pigs get slaughtered."

If anyone did short AAPL at that October 3 sell signal, I think that it was an outstanding trade, technically.  But, again, "take what's given."  That trade currently is under water.

Generally speaking, "You don't want to short stocks that are strong uptrends, and you don't want to buy stocks that are in strong downtrends."  If you do, you want to have a stop loss, and you definitely want to honor it because you can be badly hurt playing against a trend and watching the stock go down...down...down, or in AAPL's case these last years...

up...up...up...squeeze...squeeze...squeeze....