By Mike Lim
Everyone's favorite stock is reaching new all-time highs almost every day this August. How high can it go this fall and winter? Sometime this year Apple Inc did that 7-for-1 split to make their stock 'affordable' for everyone. What this really caused was to make their stock less volatile than before where $5-$10 daily swings were normal. A lot of traders loved AAPL then because you can really make good daytrading income with that daily range. Nowadays, unless you're in for a big amount daily and are happy with 40 to 80 cent daily swings, you can't really eke out enough gains on AAPL.
This year, investors have made a good amount of money buying after the split at $80 and enjoying this meteoric rise to 102.50. On a pre-split basis, that's about a $22.50 move equivalent to $22.50 x $7 which is a move of $157.50. Investors have a lot to be happy for. So, has Apple's stock gone too far too fast? The Apple fan boys will ferociously come back to me saying "NO!" We are going into the period of the market where things get interesting. This means governments around the world are back from their summer breaks and a lot of the market players are also returning from their vacations from Europe. This is all welcomed as volatility will certainly increase in the coming months.
Products will be rolled out in the coming months by Apple be it their new iPhone or the new iPADs and MACbooks. Investors will be able to determine whether it's worthwhile to hang on to their shares after seeing what Apple has in store. Earnings will also be watched closely in October. Earnings alone can be the decision maker for the buying to continue for investors to take a break and take profits.
Looking at the chart, for now, it seems the trend is higher. The sentiment is definitely bullish. Hedge funds accumulated vast shares of Apple last quarter via their 13F filings. So at this point, the bull's are in control. But as father market has taught me in the many years of trading is that a trend can reverse on a whim.
Good luck out there! :)
Traders from Equity Sense will be writing on this blog on positions and other market-related things.