AAPL Bullish Stock Chart

Hi,

Just found your site and I think its great! I only recently got in the market so want to learn all I can. I got into AAPL with 1/3 position around $70 for a fall holiday trade…where would you put buy or sell limits and can I determine that from the chart? Looking forward to more posts sir!

~Jeff

Hello John … im also running an economics blog, and would like to say a little about apple. I used to be a technical trader, but .. quit.

Technical: Now, the formation from April does definitely suggest a cup with handle, and with some semblance of decreased volume around the handle (although this may be only a seasonality effect.). The breakout only occurred on reasonable volume … overall, given your long-term views, the risk:reward of this trade does not seem all too favorable given the 85 resistance not far away, and the neessity of stops around the high 60 area.

Fundamental: Apple with several recent announcements is definitely trying to gear up with winter 2006 product launches. The addition of features “not previously thought before” such as color is a sign that they are trying to wring all possible value from the now slowing iPod line (makret saturation and effective competition), since much of the value of AAPL’s shares is justified by a “wide moat” (to borrow Morningstar’s term) around the iPod franchise which is increasingly constricting. AAPL has largely become a hardware company, so launches of OS X 10.5 will not likely influence prices, but many purchases still hinge on Adobe’s Creative Suite 3, which is unannouced. Overall, Apple will have a difficult time trying to maintain fantasic growth rates - go ask any population biologist about the logistic curve.

My friend, it seem like an h&s pattern with target fo 88 dollars per share.