Time to sell Apple? 3 reasons it will go lower
By Thomas H. Kee Jr.
Apple Inc. is flashing sell signals and there are three reasons why the stock will likely head lower.
When Apple /quotes/zigman/68270/delayed/quotes/nls/aapl AAPL +1.24% was running up towards all-time highs people should have sold into that strength, even though the momentum back then was huge. Anyone who did sell was then able to buy shares back at much lower levels. The same thing may happen this time as well (although the feedback from the Apple-diehards to be much more reasonable than it was back then).
I always become more vocal when Apple is at a resistance level, but there are clearly times to buy Apple. I was pounding the table near $395, for example, because it was clearly oversold back then, but that is not the case now. Although I will be a willing buyer again at some point (almost for sure), now is not that time.
TRADING STRATEGIES: December
Terrence Horan/MarketWatch
To be clear, nothing is wrong with the company, I actually just bought a MacBook Pro and it is probably the most powerful and well-built machine I have ever had. I like the products, but products do not make you money in the stock market. All that matters is price, and if you are paying attention, Apple’s price is ripe for a pullback.
First, the stock surged by 10% from the Thanksgiving holiday week up until the announcement of the China Mobile deal last week. If you don't think the news was expected, go back and look at what the stock did leading up to the news. Not only had the Street been wanting the China Mobile deal for years, but they bought Apple ahead of the news. We can never say for sure, but they seemed to know it was coming.
Second, the reaction to Apple’s stock price after the news was lackluster. If you were expecting a surge on the news you were definitely disappointed, but this is nothing new. Apple tends to rally on rumors, and sell off on news. Thus far that is exactly what has happened here.
Third, the stock hit our longer term resistance level on Thursday, and that is a sell-short signal. It also tells investors to hedge their positions because Apple now has the propensity to decline back to longer term support as that is defined in our real time trading report for Apple.
Therefore, even though Apple is a good company, even though I like their products, I realize that those feelings are not going to make me any money. All that matters is price, and this is definitely not the time to be buying Apple.
If you want to see me debate this live , I did so last week.
Disclosure: Kee has already recommended to clients to sell and consider shorting Apple .
/quotes/zigman/68270/delayed/quotes/nls/aapl
By Thomas H. Kee Jr.
Apple Inc. is flashing sell signals and there are three reasons why the stock will likely head lower.
When Apple /quotes/zigman/68270/delayed/quotes/nls/aapl AAPL +1.24% was running up towards all-time highs people should have sold into that strength, even though the momentum back then was huge. Anyone who did sell was then able to buy shares back at much lower levels. The same thing may happen this time as well (although the feedback from the Apple-diehards to be much more reasonable than it was back then).
I always become more vocal when Apple is at a resistance level, but there are clearly times to buy Apple. I was pounding the table near $395, for example, because it was clearly oversold back then, but that is not the case now. Although I will be a willing buyer again at some point (almost for sure), now is not that time.
TRADING STRATEGIES: December
Terrence Horan/MarketWatch
To be clear, nothing is wrong with the company, I actually just bought a MacBook Pro and it is probably the most powerful and well-built machine I have ever had. I like the products, but products do not make you money in the stock market. All that matters is price, and if you are paying attention, Apple’s price is ripe for a pullback.
First, the stock surged by 10% from the Thanksgiving holiday week up until the announcement of the China Mobile deal last week. If you don't think the news was expected, go back and look at what the stock did leading up to the news. Not only had the Street been wanting the China Mobile deal for years, but they bought Apple ahead of the news. We can never say for sure, but they seemed to know it was coming.
Second, the reaction to Apple’s stock price after the news was lackluster. If you were expecting a surge on the news you were definitely disappointed, but this is nothing new. Apple tends to rally on rumors, and sell off on news. Thus far that is exactly what has happened here.
Third, the stock hit our longer term resistance level on Thursday, and that is a sell-short signal. It also tells investors to hedge their positions because Apple now has the propensity to decline back to longer term support as that is defined in our real time trading report for Apple.
Therefore, even though Apple is a good company, even though I like their products, I realize that those feelings are not going to make me any money. All that matters is price, and this is definitely not the time to be buying Apple.
If you want to see me debate this live , I did so last week.
Disclosure: Kee has already recommended to clients to sell and consider shorting Apple .
/quotes/zigman/68270/delayed/quotes/nls/aapl
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