Last week I urged you to be patient and wait for Apple
(NASDAQ:AAPL) to retrace before buying it (see Potential Entry or Add Price Points as Apple (NASDAQ:AAPL) Launches iPhone 5
). Well, now’s the time.
(Charts courtesy of investools.com.)
Apple retraced off the $705 to hit a low this morning near $661. That represents a 6% retrace on what has to be one of the strongest stocks in the market both technically and fundamentally. As always, there are worries about this and that, both for the world economies and Apple, but that is always the case when a stock or market falls. You have to look at the supply and demand equation as exhibited in the chart above and in the prior article and ask whether or not this stock is witnessing an increase in selling on the way down as compared to the way up. From where I sit, it isn’t, and that makes it a buy at these levels.
Another reason to buy today was that a very short term ABCD down completed (actually overshot).
As I talked about in last week’s article, there’s an outside chance this could trade back to retest and regenerate off the weekly breakout bar around $641, but with Apple, you have to buy on the way down, averaging in along the way while hoping they will take it lower but realizing the odds of it happening are not great. I turned this morning and added to Apple positions as a result.