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5 Massively Important Observations on Apple

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And a worthy thought on Research In Motion.

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MINYANVILLE ORIGINAL

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

There's been a lot of focus on Apple (NASDAQ:AAPL) of late; with the stock down 28% since the all-time high in September, investors, traders, speculators and commentators are watching it on a number of levels.

Smatterings of observations include:
  1. On a short-term chart, $500 represents the right shoulder of the (potentially negative) head & shoulders pattern we've been flagging for a few weeks (click here to view). Should Newton prevail and gravity take hold, this pattern "works" through a pure technical vacuum to in and around $400ish.
  2. On a long-term chart, $500ish represents an uptrend line that's been in place for four years.

    I bring this to your attention for two reasons; the level, naturally, is defined, and in the absence of clarity, price points assume added importance for those who look to justify equity movement.

    I will note that even at $500-28% lower than where the stock was a few short months ago-the stock remains 550% higher than it was four years ago.


  3. Minyan MB notes that the daily DeMark pattern is triggering a buy signal in Apple. I know Tom DeMark and have tremendous respect for his work, so I would be remiss if I didn't share this fare in the interest of seeing both sides.
  4. Finally, and while this is not specific to Apple, although it may well have something to do with the decline, Research In Motion (NASDAQ:RIMM) is getting set to unveil its snazzy new BB10 operating system, as previewed in the 'Ville a few months ago.
RIM reports on Thursday, and should the stock gets smacked -- which wouldn't be a shocker given the 130% rally since September (which was when Apple topped, by the way) -- I would be a buyer (at the right price) into the January 30 launch of the new operating system, and perhaps beyond. (For more information on RIMM, also see: RIMM: Will Thursday's Earnings Prompt a Short Squeeze?)

Check that chart here; if you believe there are no such things as coincidences, a picture speaks 1,000 words.

  1. So, what does this mean for the stock market? A lot, unless we've witnessed a sudden divorce between Apple and the Nasdaq (INDEXNASDAQ:NDX), which would be a massive departure from when Apple was The Most Important Stock in the World.
I've updated the Apple vs. NDX chart below as a graphical representation.


Sir Isaac Newton didn't earn his reputation as one of the smartest folks in the history of mankind as a function of his handsome looks and chiseled abs. Keep this stock on your radar as it probes $500, and remember that the animal spirits are alive and well as we trickle toward year-end.

Good luck today.

R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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