I am generally bearish on AAPL, mainly because of the following technical reasons i posted earlier
Funny how nobody liked it even though it was dead right... at least I made some good money out of it... Looking at it now I think it is likely to turn lower to continue an AB=CD correction down to around 66.77 would be fantastic (down for a garltey buying pattern and also a gap close...
I don't usually look at fundamentals, but Tradingview is such a good platform that it has these available anyway, so I dropped on gross profit, Debt to equity and Gross Margin, 3 simple measures
Not surprisingly Apple is a cash making machine with gross profit rising, however the debt over the last 2 years has risen very quickly due to the management not wanting to repatriate overseas funds and pay taxes.... which leads onto the final indicator below of Gross Margin,
While profits and the stock price are rising - the gross margin is falling and diverging, if interest rates rise in coming months as the fed raises the feed funds rate these debt costs will start to take a bigger bite out of this apple's profits....so I bias is still for lower prices to ~$67 at which point I would consider buying
Comments
Sachinsyd
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after initial rush to buy Iphone 6S, sales cud drop rapidly as not much new in the phones . If Global growth slows Iphone sales will fall. Aug lows can come easily .
dionvuletich
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I do not know the future I only know what I should be doing right now and that is selling rallies based on technical than you for your comment
Sachinsyd
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Thanks for reply. I do not trade solely based on my Fundamental view. Apple is yet to show signs of breaking MA support therefore waiting
dionvuletich
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Yes, I agree.. there is no indication right now that it is breaking down just yet,
Based on the 5 wave advance I believe it is likely that we are going to see a 3 wave correction lower before continuing higher - I don't agree with the first comment Jakub made above about not reaching $67
To put it in perspective in 2009 it was trading at $11.17 - only 7 years later it is trading at $134 or 12x that - a 50% correction would be in the vicinity of $67 on the back of stock repurchases etc
Markets move in waves, they move up - correct - move up again etc etc, this is simply a correction and I am trading it short because it is the right thing to do... It's normal, natural and healthy to do so long term - Fundamentally Apple IS a good company but at the moment it is simply going through a correction and I'm trading it down to where I want to buy it again...
JakubKonieczny
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get real. at $67 pps that would be trading at 5x Ebitda. the company is undervalued as it is
dionvuletich
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Thanks for your comment, you may well be right but I don't trade what I think I trade what I see, it is not uncommon for patterns of this type to go below the A leg which in this case would be<60.... I'm not asking you to trade it but I am happy making money off the decline