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Apple Inc. (AAPL): Easily Vulnerable To The $400 Level

April 10th, 2013

down plunging pricesMitchell Clark: Stock market action has been exceptionally strong since the beginning of the year, and Wall Street must be making a killing with so many new initial public offerings (IPOs).

The lack of consistency in economic news is a real problem. Wall Street has been upgrading many popular stock market brands. It really is cheerleading.

Companies like AOL Inc. (NYSE:AOL), The Gap, Inc. (NYSE:GAP), priceline.com Incorporated (NASDAQ:PCLN), Under Armour, Inc. (NYSE:UA), and even Yahoo! Inc. (NASDAQ:YHOO) got upgraded. Google Inc. (NASDAQ:GOOG) was just rated a “Buy” by UBS after the position jumped $100.00 a share on the stock market.


The proof will be in the pudding. With so many of the big names at all-time record highs on the stock market, they should correct when they report. If they don’t, I will be very surprised. (See “Breakouts All Around; Final Countdown or the Beginning of a New Cycle?”)

The one stock I don’t know what to do with is Apple Inc. (NASDAQ:AAPL). It’s like there is a tremendous amount of people on Wall Street with this position.

Did the company just price itself out of its own market? Is it the revolt taking place in Apple retail stores? Or is it just a unified Wall Street trade? I don’t know what to do with this company.

I don’t use an “iPhone,” but when I bought a “MacBook Pro,” I received good in-store service from a particular associate. When I decided to buy more RAM (random-access memory), I called the store and asked for the same guy. Then I got berated by this punk kid who said that they don’t do this, and he wouldn’t tell me when this associate would be working because of privacy issues. I thought, “I’m getting too old for this.”

Wall Street is holding this falling trade fairly well. Current average Wall Street earnings estimates for Apple are flat for 2013.

Every business experiences problems. But authenticity in business (and in any endeavor) is absolutely critical. I guess that’s why Steve Jobs personally resolved some issues with customers. Apple needs to step it up a notch.

Apple’s stock market action makes it easily vulnerable to the $400.00 level. Wall Street earnings estimates for the company have been downwardly revised, although there’s a big range for 2014. I’d say that until there’s a convincing new stock market uptrend in Apple, picking a bottom is total guesswork.

On the cusp of a new earnings season, investment risk in the stock market remains high.

Wall Street is likely to report very good financial results this quarter. But it’s very important that individual investors not forget about investment risk.

There are so many things in this world that can derail this stock market and the U.S. economy. Sovereign debt and the potential for currency destabilization remain the top near-term risks.

This article is brought to you courtesy of Mitchell Clark from Profit Confidential.

Related ETF: Technology Select Sector SPDR (NYSEARCA:XLK)

Top 10 Holdings (63.11% of Total Assets)
Company Symbol % Assets
Apple Inc. AAPL 14.31
International Business Machines IBM 7.35
Google Inc. GOOG 7.35
Microsoft Corporation MSFT 7.26
AT&T Inc. T 7.03
Verizon Communications Inc. Com VZ 4.60
Oracle Corporation ORCL 4.46
QUALCOMM Incorporated QCOM 3.88
Cisco Systems, Inc. CSCO 3.82
Intel Corporation INTC 3.05


NASDAQ:QQQ, NYSE:XLK


 

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