Here’s your trade on Apple (AAPL() (February 25, 2013)

by DAN AAPL SP-500 
I’m Dan Fitzpatrick here at Stock Market Mentor and OptionMarketMentor.com. Today I want to look at Apple ( $AAPL Apple Inc ). We got a pretty big pullback, pretty broad actually. You look at the S&P 500, heavier than average volume, on a decline here, and so this is some selling that I want to capitalize on. I sent out probably the shortest post I have ever done mid-day today, and that was “So Many Shorts, So Little Money.” The bottom line is, a lot of stocks are going down and they’re going to offer us buy points but that’s for another time; in fact I’ll be talking about that in the Strategy Session today. But I want to talk about Apple ( $AAPL Apple Inc ). Look, it appears as if this stock, it appears as if this stock is finding support right around at $435.00 $436.00. So do you want to buy this stock? You go ahead, I’ll sell you some. The bottom line is that the stock has not found a bottom yet. A series of lower highs, including this one, and we got a series of here, some lower lows as well. They were converging but this wedge resolved to the down side, which you often see happen. But look, that’s a real bearish sign. We still have a lower low; this stock went clear outside the lower Bollinger Band here, so it was kind of due for some consolidation. This is fine, I don’t buy stocks that are just down here and I say, “Well they’ve gone down far enough.” I’ve done that before just like I’ve shorted stocks under the theory, the Fitzpatrickrian theory that a stock has gone up far enough. That’s pretty stupid reasoning and just about every time I have traded on the idea that I knew more than the market and that I just decided that a stock has gone down far enough or it’s gone up far enough and basically been a counter trend trader; typically I’ve have lost money. So here, am I going to buy this stock? Nope, I’m actually short; this is why. You look at the weekly chart and this thing, I mean all I see, I mean I see a Thelma and Louise chasm here. I’m not saying it’s going down to eighty but there’s a lot of room for downside here. I would say chances are pretty good that most of this box, at one point or another, most of this box is going to get filled. My assumption, my underlying premise is, it’s probably going to be something like this. Now, whether we find support here, at this level, which by the way just kind of goes back to here. I don’t know, but I’ve said this recently before, and I love Apple ( $AAPL Apple Inc ), I’m surrounded by Apple products, Apple TV, my iPad, my two iPhones, actually I have two iPads as well, two Macintoshes, one desktop and one Mac Book Pro. So I’m a huge fan of Apple ( $AAPL Apple Inc ) but here’s the thing, I have everything that I need, what else can I buy? I don’t know, I guess I could buy something, an iPod Nano? But I’m pretty much chocked full of Apple ( $AAPL Apple Inc ) stuff, not going to be really buying anything anytime soon. In fact, what I’m waiting for is the next Samsung Galaxy, which is supposed to be released next month. The bottom line is this, and again I’ve said this recently; Apple is ( $AAPL Apple Inc ) kind of losing the cool factor. You know what I’m talking about because it’s not as cool to you as it used to be. Is it really as cool right now, in February, to own a new Apple ( $AAPL Apple Inc ) product, as it was, say a year ago, or as it was, say right up here? My bet is, no. If it is to you then you’re the only one on your block who feels that way. It’s not like this is a, you know, I’m not down on Apple ( $AAPL Apple Inc ), again, I love their products. But the stock has peaked. I wish I could trade Samsung directly, but I can’t. What I can do, actually, as a trade on Samsung, is too short Apple ( $AAPL Apple Inc ). And that’s what I’m doing, that’s what I’m just suggesting that you do. So be careful of this stock because they can introduce a new product. Maybe it’s an iMicro chip that’s embedded in your skin and then you get iTunes played in your brain anytime you want, all you need to do is think about something, I don’t know, I’m rambling here. The bottom line is this, they could come up with a new product anytime, but, I’m telling you; there’s a lot of pain in this chart, in this red box, and if you get any kind of buying pressure to push this stock higher, my bet is that buying pressure is going to be hit with a lot of selling pressure and ultimately you’re going to get a move at the bottom of this box. Anyway, that’s my take on Apple ( $AAPL Apple Inc ), hope it helps. Members get over to the Strategy Session; I’ve got a lot of stocks that I’m covering. Most of them broken, but I also want to talk about a shopping list of the few different stocks, in a few different sectors that you want to be looking for in order to take advantage of this pullback. If it goes down further, we’ve got some stocks that we want to buy, that we’ve been a little bit scared to buy, because they’ve run so far. So get over there now.

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