First Technology stock being reviewed as requested by a visitor.
Apple Inc. AAPL is in an interesting trading range. Bulls are the biggest believers in the TECH rally while BEARS feel that the Tech stocks are overvalued. As of now, Apple is trading higher than it used to be. Traders are thus finding it uneasy to allow Apple to climb to high in such a turbulent economy.
Bull CASE:
Sales are shooting up. IPAD will drive in revenues
Technology sector will rise
BEAR CASE:
Apple Inc. is severely overvalued.
Major resistance seen at the 200 and above level.
Investors and traders are pressuring high prices, disallowing Apple to be above $200 for a few days.
I will just use the chart to tell us what is happening.
BULL:
There should be support at both lines I have drawn. The first line seems to be broken today, thus the stock should head to the bottom line which is a stronger support as it is also the BULL FIB line of the major uptrend that started in March 2009.
Stochastics suggest that Apple is oversold and it is ready to cross upwards signalling an upward rally.
Stock has not risen more than 20% above the highs a year ago. There is still room for growth.
Apple sales are indeed going up. And growth seems to be sustainable with their superb innovation. Thus allowing the high P/E.
BEAR:
Moving average seems to want to dive downwards.
Stock has been in a consolidation for 2 months and the Bear would win if the stock head downwards to the 23.6 Fib line.
As a result, the stock may want to retrace to the 38.2 FIB line which is the strongest support for a fundamentally sound stock.
Stock may want to test the 200SMA.
PLAY:
Wait for clearer chart signals.
I will accumulate APPLE INC AAPL at each FIB line as the fundamentals are too good and may override the technicals. However, we must still obey the patterns of technical analysis as traders often take advantage of them.
BUY APPLE INC AAPL @ $180
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