Transcript Most other financial podcasters are going to start their 2010 shows off with reflections over this past year, 2009. A year where we experienced one of the most devastating financial storms in United States history. Well, I’m not going to do that, we all know what happened, and we all know why. Instead, I’m resolved to looking forward to reveling in all the great things to come. Pundits are claiming this is the year of the tablet, as the evidence points to a bevy of manufacturers readying their entry. But none are more anticipated than the rumored Apple Tablet.
And it’s apparent that tablet makers will alter any release plans, and wait to see what Apple has in store. They’d rather take a hit on whatever investments they’ve made to date, rather than go up against a game changer.
But will it be a game changer?
Of course, everyone is looking at Apple to lead the way. And why not? Apple has led virtually every other personal computing revolution in the past. And if you understand the competitiveness of Steve Jobs, and the insider reports that he’s taken a personal lead on this project, and the fact that this may be his last major project, you’ve got to think he’s got something special in store.
So the field has been set for the Apple Investor. We have a January 26th Apple media event, where an Apple Tablet MIGHT be introduced. And we’re riding a 10 month Bull rally, that still has plenty of kick in it. I expect the anticipation of this event to inject plenty of volatility into the equation.
Now, part of that equation is a bullish flag pattern setting up for AAPL. A flag is a continuation pattern, which means that a stock will pause, let buyers and sellers settle down, then stock prices should continue to rise. But first it appears that AAPL and the markets might pull back slightly to finish the unwinding of overbought conditions started late last week.
So long as the markets and AAPL stay above their respective 50 day exponential moving averages, the pattern is set to go. So, with this I’m expecting a buying opportunity this week as Apple pulls back a bit, then a follow through of the flag pattern, which means that AAPL, aided by all the pent up anticipation, should rise right into the following week and perhaps right into the big January event.
This looks like a classic, buy the rumor sell the news opportunity. Does anyone doubt that the next three weeks are going to be fraught with rumors, leaks, phantom reports, and more? As this event nears, I anticipate price volatility will pick up. And at the moment of the event, we can expect to see wild swings in Apple’s price, each swing in unison with every product benefit uttered by Steve’s lips.
So my plan is to see if a swing trade will setup on the 60 minute charts. There’s already a breakout in play on the daily charts with a similar flag pattern. And the target on that is approximately 220. So you can say the flag on the 60 minute chart is a fractal of the flag on the daily chart.
AAPL 60 Minute Chart Bullish Flag
If AAPL’s stock price pulls back to the bottom of the flag pattern, which would represent solid support, or approximately 209, then I’ll go long. The stop should be placed just below the 50 day exponential moving average, which is currently at 207. A breakout of the flag pattern would be at 213, or the top of the flag.
Should AAPL break above 213 with any appreciable volume, the pattern should play out to approximately 220.
Isn’t that interesting! The fractal pattern has the same target as the larger flag pattern. Hmmm. In any event, 220 looks like an objective level to take profits, before the Tablet event. A lot can happen in three weeks, so this setup isn’t written in stone, but for now, it’s my plan, and I’m sticking to it.
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