Apple Investors We Got Our Wedgies
What a great day in the market yesterday (August 28) if you’re a Bull, as all the major indices broke out of their respective wedges, and to the upside! Much of the advance can be attributed to the surprise GDP numbers, revised to 3.3$ growth, and improving Jobs environment. Strong performances all around, in almost every sector, and strong market internals.
There were some sectors that lagged, but they’re the anti sectors, Energy and Commodities. Financials did extremely well, but of course the sector we’re interested in is the Technology sector, and it did well too. It was curious though that Apple (AAPL) and Research in Motion (RIMM) did not participate in all the fun. The other horsemen, GOOG, BIDU, and AMZN, did Ok. Hmmm.
On the basis of this break out, I would consider a Swing Trade with AAPL. I posed the following trade yesterday to my Investor Group.
| AAPL Long Swing Trade | |
|---|---|
| Best Entry | $173.00-176.00 |
| Target | $190.00 |
| Stop | $169.00 |
| Risk | Medium |
This alert has been edited to reflect what I believe is a more cojent position that one might consider. The edits include expanding the entry and lowering the stop, just below the 50-day moving average fo $169.74. Note: the stop is on a closing basis.
So now the big question is, will the advances stick? Will the Tech sector be able to hold up these advances and turn what was once impenetrable resistance into solid support? That’s a big concern because Dell got hammered last night, and not because they imbibed a bit too much at the rally party. Dell (DELL) reported a 17% decline in profits for their second fiscal quarter. The story goes that it was a self-inflicted hit by Dell, due to their excessive exuberance in an attempts to buy foreign market share. Most investors thought Dell would deliver, especially after HP reported so well.
Isn’t that interesting. The company that sells cut-rate Windows based machines, with ultra slim margins, can’t compete with Apple which sells first-class personal computers with margins that are the envy of the industry. This looks like another huge opportunity for Apple to gain even more market share. The only concern is that some investors may look at Dell’s poor showing as a reflection on corporate spending.
So, today’s market action will be particularly important. The S&P finished above that elusive 1300 mark, next targets for the S&P are 1313 and then 1325. Can we hold those break outs above the wedges? Tell me what you think; is this breakout for real, will it hold, recession over?
n
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