Tuesday, June 08, 2010

Comparing Apple Inc. (AAPL) To The S&P500


Above is a daily chart which shows the closing prices of  Apple Inc. (AAPL) and the S&P500. I chose to use a line rather than a bar chart to help filter out some of the volatility so that the chart will appear much clearer.

The first thing that stands out just looking at the last few weeks is that the S&P500 is making lower lows and lower highs while AAPL is making higher lows and higher highs.  I numbered the the 3 points I am referring to so that you can easily see the divergence that is now taking place.  The fact that AAPL is able to make higher lows in the face of a falling market is a very bullish sign that this stock wants to move higher. The only thing holding this stock back is the negative sentiment that the overall market is experiencing at the moment.

The S&P is currently testing a very significant support level from last February. Any bounce in the S&P is sure to trigger a buying frenzy in AAPL. I'd certainly keep this stock on my watch list.  Today Apple Inc closed at 249.33 which was down 1.61 from Monday's close.

1 comment:

Victor said...

I had exactly the same thoughts over the last month (and did some buying), then saw almost the exact same sentiment here. People want to buy Apple, product success after success, non-stop geographical product penetration, and still a reasonable P/E.

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