Apple (AAPL) Finally Overcoming Commitment Issues

Apple (NASDAQ:AAPL) has been dead weight for the market over the past six months, shedding nearly 40% of its value and finding it difficult to sustain any type of bounce. But over the last two weeks, AAPL has started to show signs of a potential bottom.

AAPL used to be the stock that could do not wrong. Even when the company would unveil an ostensibly “disappointing” product–say, the iPhone 4S when consumers were expecting a 5–sales were through the roof and the stock price continued to climb. In six months, that dynamic was completely flipped on its head. (Apple’s Halo Cracked – WSJ) Suddenly AAPL became the stock that everyone loved to hate. Margins are shrinking for AAPL and Google Android-powered phones are starting to wrest away market share.

The launch of the Samsung Galaxy S IV, many thought, was going to be the knockout blow for battered AAPL. Taking into the account the extreme psychology shift we had seen in AAPL, we opined that the Samsung event might actually turn out to be an opportunity to “buy the news” in AAPL. Indeed, Samsung released the new phone in a hokey media event, and it wasn’t exactly the game changer many expected. AAPL gapped up the next day and hasn’t looked back, finally breaking the multi-month downtrend.

The problem with AAPL over the last few months is that each rally attempt has been met with selling and we haven’t been able to get any commitment to the upside. Over the last week, though, that has started to change. Given its weakness on a longer time-frame, I think if you are trading AAPL you still have to monitor its composure closely. At this stage, I would like to see the stock do work above the $460 area.

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Disclosure: Scott Redler is long AAPL and AAPL call spread

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About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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