AAPL Up against overbought conditions and trend support
The market is rocking, the S&P has been up 6 out of the last seven days, Apple has shot through to new highs, economic conditions around the world seem to be improving, etc, etc, etc. This is exactly why I am now thinking it’s time to take profits and wait to see what opportunities the next pullback will provide. While I still believe the market will grind higher over time, perhaps all the way through the summer, I also believe it needs a breather to get the muster to advance through this next significant level.
About a week back there was a rumor that the iPad would be delayed. Well now it appears that rumor holds some truth in it, in so far as a world-wide delivery is concerned. What’s not so clear is the reason for the delay, some reports say it’s hardware, others say it’s the OS, others say it’s last minute decisions by Stevo himself, expressing dissatisfaction with certain Apple-branded widgets, like Calculator, Stocks and Weather, that simply don’t look good enough at double size. So initial versions may not come with those stalwart utilities.
In any event, if you’re a long-time investor or trader of Apple stock, then you know there’s a pattern that plays out with every new product introduction. That pattern is intense hype and anticipation, causing the stock to rise, followed by a big sell-off once the product actually hits the streets. Why should this be any different? That’s a rhetorical question, by the way. And just for the record, AAPL has played out it’s near-term bullish pattern and is up against trend resistance, besides being extremely overbought. Apple finished the day at 219.08 up slightly +0.13 (0.06%) and currently down a healthy amount in the pre-market .
So, the way to play the market here is to take your profits, let the market pull back and work off those overbought indicators. Let it find support, which would be 1115-1118 on the S&P, 2250 for the NASDAQ, and 211.50 for AAPL. See if things have unwound sufficiently and start looking for good entries in your watch list picks.
Tagged as: iPad, Steve Jobs
