Still buzzing with Apple Watch? No? After the stock plunged to horrible depths so quickly following its launch I won’t blame you if you have second thoughts about the success of Apple (AAPL). But let me just say, if you have observed the wider market, it is going on this volatile period (again!) as we are ending the earnings season and so the love-hate relationship is not just on AAPL. Looking forward, big week with the Federal Reserve Open Market Committee (FOMC) meeting that may or may not talk about raising the interest rates. Jobs are definitely growing in number, but the wages are not. There is also the inflation, retail sales, housing and manufacturing weakening, so FOMC if you’re listening to me, no rate rise yet please. 🙂
Yesterday, it looked like the market has fallen out of love with AAPL and soon after the open the price dipped early to 121.63. I was wondering at that time if it is worth the risk and with the other major indices being green, it is always wise to confirm that the selloff is already confirmed to reverse, I know this could be tricky to gauge by “how much”, you have to study the volatility of the stock on a very short time periods, my low-risk idea, would be a price recovery above yesterday’s closing, you enter provided that there is still that 2-3R reward that is worth the risk. I show this in my live-trading webinars so I do hope you join the next runs. Email charmel@highheeledtraders.com to sign up.
If there is one thing about AAPL, it is continually growing, BUT it is a VERY profitable company. Just look at the Price / Earnings ratio which at $124.45 yesterday is 16.77 (so at the day’s low it would be around 16.30 or so) — few would boast that kind of value. So for those fearing the worst about AAPL, shake it off! The market may be falling fast but it will be a buying opportunity for those with volatilility-based systems and robust business plan. Today, US consumer sentiment will be reported at 10am, following the inflation-related Wholesale / Producer prices that looks like bad news (not much inflation > but good news for those who want to delay the interest rate hikes) it looks like another swingingly volatile day. Enjoy the ride or if you’re a newbie, stay out of it, paper trade or only put very small positions to get the feel of the market.
