Tuesday, August 24, 2010

Apple Inc. (AAPL) - Big Level To Watch For


Apple Inc. (AAPL) which has been leading the market  higher over the past year is now showing signs that the party may be over .

At the beginning of this month we saw the first signs of relative weakness in AAPL vs the S&P. As the overall stock market  moved higher, AAPL moved sideways to slightly lower which suggested that this stock and maybe even the market may be in trouble.

Today we saw AAPL gap down on good volume taking out the lows from last month. On a long-term basis the trend is still up as can be seen by the rising 200 day moving average which is below the market. This average comes in at the 231 area which also happens to coincide with a support level from last May which I highlighted in the above chart. This is a key level for AAPL which should be watched closely as it may help determine the fate for this powerhouse of a stock.

Today Apple Inc. (AAPL) closed at 239.93 which is down 2.39% from Monday's close.

2 comments:

davidch14 said...

kevin,

been watching this stock for a while. one thing that i have noticed is that the volume has been very low (~ 1/2 avg) as it has been dropping the last several weeks. yesterday, the volume was slightly better than average and the inflow $ increased significantly for the first time in weeks.

despite what the press says (i.e. cnbc, etc), i can not recall a stock with this much growth (~70%) trading at such a low valuation (ttm p/e=18, fwd p/e=13). if you consider the 46b in cash (1/4 mrkt cap with no debt, those numbers come down to 16 and 11, respectively. that is slightly less than the sp avg which apple is heavily outperforming.

so now even though AAPL price has risen dramatically to keep up with earnings (the E in P/E). the valuation has merely stayed the same since the low 100s when the banks were collapsing

Market Volume said...

I would say that from longer-term prospective, this stock is in the side-way range. The question is where it goes from there.

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