Why it’s NOT time to Short Apple and Visa

By Steve Abraham on May 05, 2008

I could not help but read the comments on Brett’s call for shorting Visa and the other conversations around shorting Apple. I have to disagree with both calls. Visa is not a short because everyone thinks its going to be the next Mastercard. Visa actually makes more money than Mastercard. I’m wondering what the catalyst would be for Visa to drop? I really don’t see any. They reporting GOOD, not great numbers but the bottom line is that you really can’t fight the tape and expect to win. I would BUY visa on a pullback. The stock is may reach $100 in 6 months.

Shorting Apple now may make a little more sense given the move from 120 to where we are today, but I still contend that that is risky as well. I think the stock will ramp to $200 until the 3G iPhone release and maybe pause there. Fundamentally, how could you justify shorting apple now anyhow? The company is minting money and hoarding crazy amounts of cash. They have the best tech CEO in the Biz in Steve Jobs and everyone knows its a matter of time before the iPhone becomes the 800 pound gorilla in the cellular business. Their PC business is taking share from other competitors at an accelerating rate. I just do not get the short call on Apple, especially not the long-term.

This entry was posted on Monday, May 5th, 2008 at 3:53 pm and is filed under Annotated Analysis. You can skip to the end and leave a response. Pinging is currently not allowed.

10 Responses to “Why it’s NOT time to Short Apple and Visa”

By ARL on May 5th, 2008 at 4:06 pm

As far as shorting AAPL—yes the stock may be 200 in the near term—Im not looking for the stock to drop to 160—Im looking for a day or two trade–stock way overbought–but that doesnt mean it cant get more way overbought—just lookin for a short term move on the downside–stocks dont always go up you know

By abc on May 5th, 2008 at 7:09 pm

ARL took your entry as a personal attack

By ARL on May 5th, 2008 at 9:03 pm

abc—-personal attack??? explain please

By Steve Abraham on May 6th, 2008 at 3:57 am

ARL, I understand the day trade aspect. I just think there are other stocks that would be better short candidates than Apple Computer. Good Luck and Thanks for the comments.

By ARL on May 6th, 2008 at 6:18 am

Steve–ok but that’s basically what I do for my trading–look for overbought situations and try to get a few points out of it–risky–yes…that’s how I trade
Should AAPL get oversold—I might even buy it—–same thing I did with V–shorted it and got a few points–gone— but I wouldn’t stay short in it
Oh and I did that with SOHU too and now looking at others
The best in your trading too
ARL

By ARL on May 6th, 2008 at 6:54 am

Steve–u watching AAPL??Im covering soon–thats all I was looking for—a brief healthy pullback
Think AAPL will see the old highs and I might even buy it
Thanks
ARL

By Jeffrey Austin White on May 6th, 2008 at 7:58 pm

I have been loading up on the Apple stock but not for the obvious reasons. I am a developer of Microsoft applications. Apple has just released a development environment for Leopard and i-phone. This will prove to be much more lucrative than the hardware sales and 3g appliances. Profits from this activity will not be realized until 3rd quarter 2008.

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By Alex on May 8th, 2008 at 10:23 am

AAPL formed a very defined cup and handle and broke out around $155. I dare you to short a cup and handle on good volume..

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