Wednesday, October 27, 2010

Apple Inc. (AAPL) - Sets The Stage For Another Leg Up


Apple Inc. (AAPL) has been consolidating for the past 8 trading sessions similar to what we saw at the beginning of this month. This is a classic bull flag pattern within a strong uptrend.  The fact that this stock is consolidating above the important  psychological $300 level is a bullish sign as it appears that the stock is finding value at these current levels. A close above the trendline would set the stage in my opinion for another leg up for this stock.

Today Apple Inc. (AAPL) closed at 307.83 which was down .22 from Tuesday close.

8 comments:

Anonymous said...

I agree with you kevin on this pattern. Do you happen to know of a site where they have daily bull flag patterns to look at?

Anonymous said...

Am I seeing a break out DOWN from you AAPL triangle today?
BTW, do you have an update on gold/silver trade?
Thanks!
jack

Anonymous said...

The trade is very crowded.
A lot of people are expecting end of year rally. The rally is very extended. RHT has a PE of 94,
AMZN PE is 68. This is a lot like
internet bubble days. There is a lot
of money tracing around a lot of low yield. People are selling bonds to buy stocks just because stocks are "cheaper" than bonds. You look
arund foreclosure is rising and people are not finding jobs. Of course, price will eventually catch up with over-valuation. We just don't know when this thing will go down...

Anonymous said...

Kevin,
One more question. Are you looking at UNG?
Looks to me like it's waking up again.
jack

Mark said...

Apple's orthodox top was last April at $272. The flash crash was an A leg down. Everything since has been 3 leg movements, i.e. CORRECTIVE. Apple set a top recently at $319 because it is in an expanded flat bear market. The B leg back up was a complex double zig-zag. The A leg almost exactly equals the C leg in the double zig zag. Look at the daily RSI/MACD. the stock is rolling and right now is on the cusp of a breakdown. It's on it's way to $80.

Kevin said...

Jack, UNG does look interesting here.

davidch14 said...

"RHT has a PE of 94, AMZN PE is 68. This is a lot like
internet bubble days."

sorta agree with those stocks along with bidu (p/e~91), nflx (p/e~65), vmw (p/e~109), etc, but you could not be more wrong about aapl. may be crowded but most certainly not a bubble on any metric i know of...

aapl with ~70% y/y growth (rev and profit) is providing better to or equal to all those companies above yet it's p/e~19 and it's fwd p/e~13 and it has over $51 billion in cash and zero debt. aapl is barely being valued more the sp500 avg for last 100 yrs (p/e~15-17) and it is consistently outperforming it by 500% or more.

AAPL is not only not a bubble, it has got to be one the most grossly undervalued growth stocks i have seen since i have been following equities since the mid 90s.

davidch14 said...

"It's on it's way to $80..."

mark,

you do realize that at $80 a share, aapl will have a ttm p/e~5.28. if subtract out the $55/share in cash for enterprise value your down a ttm p/e~1.65. This for a company growing y/y revs and profit 60-80%. i would work out the relevant fwd p/e's but i am afraid they may look a little ridiculous being under 0.

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