Fatal attraction ?

Looking at a 1 year chart of Apple, I see a beautiful uptrend in which many of us had some nice rides (including myself). If I look at the latest run -from the beginning of March- I see a (too) steep trend. The latest iPad hype contributes to that off course, well orchestrated by Apple itself.

It is I think however time to cool down, and looking at the chart, I made the following analysis :

  • A green bar represents 10USD.
  • As a rule of trading goes like “stocks are always attracted by the average”, it is time for AAPL to go lower.
  • In only 2 instances (red circles) the stock went further up after a gap at 10 USD between the 50d MA and the stock price. But then also not for a longer period.

The RSI is also above 70 (overbought level), but that can stay a longer time above 70. I found this an interesting exercise to assess future direction of the stock.

It is time to give the iPad hype a rest for a while, or does Apple keep it alive ? International launch of the iPad is postponed with one month. Reason : due to the great success in the US, they first want to use the stock for the US.

  • True ?
  • Or is something wrong with it ?
  • Are they lying and they have plenty of stock, but want to keep the hype alive ?
  • Are they building in a Webcam ? (like the wePad ?)
  • Are they adding Flash support ? (haha)
  • None of the above, but as I am writing about it, Apple is happy because I keep the hype alive. 🙂

2 responses to “Fatal attraction ?

  1. True but shouldn’t you look at percentage away from the 50 day MA not usd? 10 usd at 180 is a much higher percentage than where we are now which means aapl may have more room on the steep upside.

  2. 1/ If you do that, it is useless to use it in a historical perspective. It each time should have more room to the upside, but it doesn’t each time, so it falls back. The % is then not an indicator anymore to compare 2 moments in time. The % should go down, but with how much ?
    2/ On purpose it didn’t do any mathematical calculations of value against MA. Do not underestimate the psychology of the mass

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