I’m afraid, but I’ve got some BAD NEWS for Apple’s (AAPL) Stock Investors – AAPL is poised to decline by more than 12% in the coming weeks – and I’m being generous with my 12% Bearish prediction; it could be worse than that.
Now, a little brief history about myself and what makes me qualified to make this prediction:
For a significant chunk of my life, I’ve worked on Wall Street as an Analyst and as a Trader. I have over 7+ years of experience trading Stocks, Options, Futures, and FOREX. I also have experience trading Fixed Income Securities like Junk Bonds and Credit Swaps.
So, despite being the Founder and CEO of an App Development Company, at the core, I’m still a Trader.
Now, here’s my case for why I think AAPL could decline by more than 12% in the coming weeks:
Fundamental Analysis of Apple (AAPL)
Without getting into Financial BS and dropping lingo no one will understand, I’ll try to keep it as simple as possible. Here’s the deal, we all know Apple (AAPL) has one of the strongest Balance Sheets of all the publicly traded Blue Chip Stocks. Apple (AAPL) has over $150+ Billion in Cash Reserves. That part is undisputable. But, ever since Tim Cook has taken over, Apple (AAPL) hasn’t really done much in terms of innovating new products, and their existing products are stagnating. While at the same time, competitors like Samsung are expanding their product line, innovating, and taking some of Apple’s (AAPL) market share. In case you haven’t noticed, Apple’s (AAPL) market share in the Smartphone and Tablet market has been shrinking slowly over the past couple of years. Apple (AAPL) is no longer the greatest company of all time. And I believe the way Apple’ (AAPL) stock has performed over the past couple years, is reflective of this.
Apple (AAPL) went from being a $700 Stock on its way to $1,000 – to a $300 Stock.
And although Apple’s (AAPL) recent 7:1 Stock Split will make the stock more attractive to small investors, who couldn’t afford the stock prior to the split, it still doesn’t change the fundamental reality of Apple (AAPL).
Also, Apple (AAPL) has announced that they’ve already started the production of the iWatch – 50 Million Units to be exact. The iWatch is set to be announced sometime in the Fall. And even though I’ve said in the past that the iWatch could be the next big thing, from an investor’s point of view, it’s nothing but an iPod Mini for your wrist. I expect the iWatch Announcement to be a dud, and unimpressive. Unless the iWatch can offer something that Samsung’s Smartwatch doesn’t, it’s not going to be taken too kindly by the investors on Wall Street.
Technical Analysis of Apple (AAPL)
From a Technical stand-point, there are multiple Technical Patterns at play here:
Apple (AAPL) is currently trading in a $45 range. It could keep trading in this range for the next couple years.
Apple (AAPL) could break this range, a Bullish Breakout, in which case, the Price Target would be around $150.
Apple (AAPL) could break this range, a Bearish Breakout, in which case, the Price Target would be around $30.
Apple (AAPL) is currently trading in a Bullish Price Channel. It hit the Top of the Channel at $95, at which point, the Bears came in and knocked the stock down to $90.91.
After Apple (AAPL) announced their plans for iWatch, the stock sold-off on heavy volume.
Apple’s (AAPL) Support #1 is at $80.
Apple’s (AAPL) Support #2 is at $76.
If Apple (AAPL) were to go down to $76, it would mean that the stock has already broken out of its Bullish Channel – at this point, I recommend reducing your exposure, or closing out your entire position if you’re Bullish.
Current Price: $90.91
Price Target: $80
Despite my Bearish Prediction on Apple (AAPL), I still gotta make money. In case you forget, I’m the Founder and CEO of an App Development Company. So I need to SELL Apps.
Here, check out App Store Download’s List of Best iPhone Apps.
Posted: June 21, 2014 at 10:37 am