Can Apple’s Stock Sustain It’s Share Price?

It’s no secret that Apple stock has shot to the moon in the last 10 years. With all the media attention now, those who have been sitting on the sidelines may think it’s a little too late to get in on Apple. There is so much change going on over at Apple  headquarters. All the information regarding the future of Apple seem to contradict one another. Analysts have been downgrading Apple’s stock despite phenomenal Iphone 5 sales. Apple’s stock price has fallen from $600 down to $500. Some even question the new leadership that Apple has hired to replace the now passed Steve Jobs. Some of the news seems grim, but even at the passing of Steve Jobs the stock held steady with no heavy selling on the ticker. There are a few issues that have investors concerned:

The Loss of Steve Jobs

In case you don’t know the history of Apple and Steve Jobs, there was a time Steve was actually fired from Apple. Yes, fired from the company he created. To keep a long story short, Apple suffered when Jobs left the scene. If history is an indication of what will happen to Apple now. It’s almost a sure bet, that with time the Apple empire will slowly crumble. Things look great currently. Apple has alot invested in R&D and many products that were put on the shelf by Jobs. Currently the product line is highly concentrated, this might change as new management releases all those toys developed in the lab. There’s plenty of money to be made with the upcoming products. As time passes it is questionable that Apple will maintain it’s philosophy of “making really cool products” and opposed to copying new products.

Competition is Fierce

Companies like Samsung are relentless in capturing market share of the the mobile phone market. The courts have ruled in favor of Apple regarding patent violations by Samsung. It’s seems that a few violations are worth the profit. The mobile phone market is booming and competitors are finding every angle they can to get an advantage over Apple. The question of brand loyalty comes into play and future will only tell if it can hold it’s current customers.  Apple has a slight competitive edge when it comes to brand loyalty. Their products are first class, and the Apple Iphone seems to emulated in some form or another. Ofcourse, that may all change depending if Apple hold tight to it’s promise to innovate.

Trading Apple Stock Like a Pro

So where do we go from here? Should you buy or sell Apple stock? Based on a strict technical perspective, capturing the next large trend depends on price action of the stock at the “current moment”. At this moment the stock is in a consolidation phase and has paused in it’s upward trend. Much having to do with election season being a stagnant time for stocks as future outlook on economic policy is uncertain. The elections are over, and the markets are reacting quite positive. Using volume as an indication, there were no signs of heavy selling in the stock. Level II quotes maintained it’s normal block trading activity, and Time / Data sales showed no large lots being unloaded. As volatility in Apple stock decreases it will set up for a trend. Everything up to this point would suggest a continuation of the upward trend. All support levels are intact, and the charts show price action to be bouncing along the bottom of the support area. The key in buying a hot stock it to buy as it’s going up. The NEW high breakout above $600 is ideal after a consolidation period of 3 months or more.

 

Previous post:

Next post: