Posts Tagged 'Apple'

The Bounce Area?

The Nasdaq has fallen almost 6% from its recent high after outperforming for most of 2009.  The weakness started after Intel reported great earnings and the stock essentially went nowhere.  Then, we had IBM’s earnings.  Same thing.  Last night, we had Apple report earnings and Amazon will report later in the week.  Is the Nasdaq ready to bounce?


You can see from the picture above of the Nasdaq that the breakout we had in late December around 2200 has held in the last two days.  I think the combination of Apple’s earnings, the big Apple release tomorrow, and Amazon’s later in the week could provide a bounce.  Technology is really hitting on all cylinders right now.  But, the market was very overbought when Intel & IBM announced their earnings a few weeks back setting us up for a fall.  We have gone from overbought to oversold in just a few days.  There are definitely some negative fundamental issues to deal with.  But, technology to me is still the place to be.  Perhaps shorting weaker areas like financials against technology makes sense.  I believe the excellent fundamental news and the trickle down from the Windows 7 release will lift tech at some point soon.

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The Smartphone War

More and more people swapping out their old phones for new advanced phones that can check e-mail, text message, send pictures, receive video, etc.  The iPhone from Apple accelerated this process a few years ago.  It’s becoming so popular, Dell has decided to enter this business as well.  Since we’re seeing more players in this space, how will that impact Apple, Inc., the leader?  Recent reports are showing Apple is actually taking market share from other carriers including Research In Motion (RIMM), which is why RIMM fell so much a few weeks ago.

This morning, Nokia (NOK) reported a loss of over $800 million.  They haven’t kept up with the smartphone movement and it’s showing.

I’ ve always been a big fan of pairs trades where you go long one stock and short another.  AMZN vs. BBY is an example that has worked.  Below is a picture of AAPL vs. NOK since 2005.  NOK is flat since that time while AAPL is up 250%.  I think this trend will continue as long keeps taking market share.

aapl vs nok

Nardelli Works His Magic Again

Today, Bob Nardelli, CEO of Chrysler, announced he would leave the company after Chrysler completed its bankruptcy.  Now, you may sayit’s not his fault the company went under.  It’s been a really tough economy and he inherited a tough situation.  That’s true but if the economy in 4 years is worse than it is today, will people say well President Obama inherited a bad situation?  No, he’ll be on the hook.  Nardelli is on the hook. 

Nardelli’s track record isn’t that great after this latest catastrophe.  Before taking over as CEO of Chrysler, Nardelli was the CEO of Home Depot.  He took over at Home Depot in December, 2000.  During his tenure, Nardelli practically ran the company into the ground and left that company in January 2007 (see stock performance).  But, he didn’t leave Home Depot empty handed.  He walked away with $210 million, seven times more than the employees were to get that gave good customer service.  I’m not sure if you’ve been in a Home Depot lately but I’m sure they haven’t paid any money out with their horrible service.

How much will Nardelli get for this latest venture?  I doubt he’ll get the golden parachute he got last time.  He’s on quite a roll though isn’t he.  I sure hope he doesn’t take over for Steve Jobs at Apple@#$%>?

A Test For Apple (AAPL)

Technology stocks have had a nice run lately but is it about to end?  One of my holdings is Apple, Inc. (AAPL) which I’ve written about lately.  They’ve had the Steve Jobs drama and then the excellent quarterly report with record sales & profits.  But, looking at it technically brings up the question, is this the time to buy?  I’d say wait for a breakout.  You can see below that it has been making lower highs since October and is right now at the top of the channel.  I would expect a breakout and a pullback.  That would be a safe entry point.  RIMM & AAPL both look good but I’d wait on both of them, especially Apple.

 

Apple, Inc. (AAPL)

 

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Big Reversal & Apple

I thought we were close to a trading bottom yesterday and today we got that big intraday reversal.  Just after lunch, the markets all turned around and after being down most of the day pretty hard.  They began to rally and the Dow was up about 75 points before pulling back.  Now, we didn’t get so oversold that I covered all of my short positions, but I did cover some of them when the late day rally faded to lock in some really nice gains from just last week when I put more short on.  

I don’t think we’re oversold quite enough for a real long sustainable rally.  So, it’s possible we get just a couple of days of up and then the pullback continues.  But, we were oversold enough to cover some shorts.  After all, we had fallen 6 days in a row, and about 11%.  This would have been the 7th down day in a row.  You don’t typically see that. As with any rally, we have to monitor the quality of it.  I’m not holding my breath.  If we’re range bound, the Dow bottomed roughly right where it should have and perhaps it makes a run up to the 9000 level once again.  You do have to love an intraday reversal though.  Those are the best kind, especially when the volume picks up as the market is running up like it did today.

Apple

I never got a chance to buy more Apple today as rational investors came in this morning and pushed the price back up after that ridiculous 10% sell off after the bell last night when Steve Jobs announced his leave of absence.  After my radio show this morning when I mentioned it would be a buy if it opened 10% lower, it was upgraded by some firm. What influence I have (yeah, right).  But seriously, I think Apple at these levels is very attractive not only for a trade but for an investment.  Earnings are due out later this month and we’ll see if they can surprise us all.  If the stock falls because of temporary weak Christmas sales, I’d buy it on that dip as well.

Apple (AAPL)

I became really bearish on the market when in late 2007 the leadership groups began to fail such as technology and emerging markets.  One of the leaders that accounted for most of the gains in 2007 on the Nasdaq was Apple (AAPL).  This stock basically doubled in 2007 going up over 133%.  But, it’s down 36% just in 2008 going back to $120.  Ipod sales came in a little bit less than most had hoped.  The negativism is high on Apple right now.  But, remember that it’s the computer sales that are really driving growth.  Their computers make up a very small percentage of overall desktops and laptops out there.  That percentage is going up every month.  Many people are buying Apples for their personal use and keeping their PCs for their business use. 

I think based on the fundamentals going forward (growth at 33%) and the stock down to $120, it’s compelling now.  Also, some of my technical analysis shows that the stock may be bottoming.  It may move sideways a little longer.  But, there’s been a lot of volume at this price level showing a lot of commitment.  The stock’s been moving sideways really since early February.  Keep an eye on this one.

As I’ve mentioned in previous posts, buying good companies that can outperform while still hedging by shorting the overall market is still a good strategy.  As I write the post, the Dow is down 119 but Apple (AAPL) is up almost $2.


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