Apple (AAPL) - 02-28-2008
I’ve been asked for my thoughts on AAPL so here they are. Everybody knows about the iPod success story and that Macs are slowly gaining marketshare so I won’t go over any company history. The problem is that Apple makes what I would consider luxury items. As much as your kid claims they won’t survive without the latest iPod (and we won’t even talk about the iPhone), nobody really needs one. A slowing economy could definitely hurt a stock like AAPL. That said, the earnings have still been going up and the stock is having a 40% discount sale right now.
If you’re in love with the stock and looking for a long entry point I see several options. The first option is to wait for a breakout over 200. That may take a long time to happen though, but patience is usually a good thing when it comes to stocks. Another option (though less appealing) is to wait for the stock to fill the gap that’s highlighted on the daily chart above. If you did enter there, you would have to be very defensive with your stops, since failing in that range would put the stock another step closer to completing a head and shoulders pattern on the weekly chart. The last scenario we’ll consider is if the stock drops further, at which point you would find some resistance around 100 as your new buy point, and you could pat yourself on the back for not buying at 130. And if it goes even further than that, keep sliding the buy point down till you’re either out of love with the stock or it reverses and you get your shares.
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