AAPL ten percent rallies have stalled out before

BATS:AAPL   Apple Inc
I know how I feel about repetitive patterns: Patterns tend to repeat until they are obvious and then the pattern changes
There is no simple solution to making money in the market in the long run. Think independently. Figure out what people are doing without thinking and take the other side of their "no thinking" trade.

In this trade setup, I think the "no-thinking" crowd is just using every 10% rally to sell short. Now with AAPL sitting on a very different valuation than last year and earning a decent return on equity, the prospects for AAPL shares are better. The net valuation of AAPL is roughly $300 billion ($423 billion market capitalization of equity, less $130 billion in cash, is roughly $300 billion). AAPL made $17 billion or nearly 6% return on "net equity" in just the last quarter ending Dec 2012. This 6% is an attractive return when you consider that most stocks don't even make a 6% return on equity in an entire year. A P/E of 16 is the equivalent to a 6% earnings yield.

I like my odds down here in AAPL . Short sellers prepare for "something different" this time.

Tim 1:29PM EST , March 19, 2013 449.45 last AAPL
Subscribe to my indicator package KEY HIDDEN LEVELS $10/mo or $100/year and join me in the trading room KEY HIDDEN LEVELS here at TradingView.com


AAPL is building a very nice base formation. I have to imagine that the shorts are beginning to re-think the strategy of "selling all rallies" in AAPL shares. I can imagine a very slow, grinding rally from here to the 480-500 level over the next 30-60 days. A slow rally seems likely also as the sellers are most likely out of ammunition. As we near the end of the 1st Quarter and as stocks that have underperformed are culled to their "proper position size" so that the portfolio looks as nice as possible for quarter-end publication, this will have the beneficial effect of providing some support for AAPL shares. AAPL has been overweight in far too many portfolios for too long and those that got away with it and sold into good news (iP5 release) have done extremely well. Imagine a 10%-15% return for AAPL in the 2nd quarter while the overall market is flat to down on the reality of a slow-spending consumer and sluggish retail environment.