Apple (AAPL) began trading on a 7:1 split adjusted basis today and the buyers kept coming. Let’s look at three different timeframes and decide what to do. (June 09, 2014)
I’m looking at Apple ( NASDAQ:AAPL ) here. The stock’s split 7.1, so it’s trading below $100.00, which is the first time it’s done that in many years. There was a lot of conjecture about selling; back in the day, it used to be when a stock split, 2.1 usually, sometimes 3.1 or 4.1, when it split folks would be buying the split and it would just keep running. Then lately, over the last year or so, when these stocks have split, MasterCard ( NYSE:MA ) comes to mind, where it split 10.1, it still hasn’t regained that level. Google ( NASDAQ:GOOGL ) split 2.1 back here in April, and it hasn’t quite gained that level either, it’s close to breaking out but it hasn’t quite gotten there. I think there were a lot of folks thinking that once the stock split a lot of traders would be selling their stock and that selling would push the price lower. Then you contrast that against the suggestion that perhaps retail traders are waiting to buy this stock, because they can make a better case for buying a stock that’s under $100.00 than they can buying a stock that’s at $700.00. There’s nothing different about the company, but those were the two opposing arguments.
We look at the 5-minute chart, first of all the stocks up $1.45 today, which doesn’t seem like that much, but multiply that by seven and you had a pretty good day in Apple ( NASDAQ:AAPL ). The thing that was interesting to me was, on this 5-minute chart, you can see how right at the open the stock started gyrating around a lot and then did sell-off; but that sell-off, look at the volume, this was some pretty big trading volume here on this green bar, you can’t really see it, but then over the next two, when the stock did decline, the trading activity was lower. So we go all the way into the close, there, I’ve gotten rid of the after market data, but you go all the way into the close and the stock has actually been consolidating. Now, institutions would be what keeps this stock up, 2 million shares were traded just at 4 o’clock, that’s not Jim Bob’s trading fund, this is big money coming in, so you’re still getting some buying coming in.
What I would suggest you do is just stay long Apple ( NASDAQ:AAPL ), I don’t even think you want to look at this chart, I think you want to look at this chart, because if you look at this you can see how the chart is just trickling up around the upper Bollinger Band. I don’t think it’s going to be any time at all before this stock gets up above $100.00, which is right about where the high is. So I would stay long Apple ( NASDAQ:AAPL ); if you’re not long Apple ( NASDAQ:AAPL ), frankly I think you can still buy some, don’t just go pile in. If the stock was going to sell-off big it would have sold off big today, it didn’t do that. So stay long and strong, keep a trailing stop though so you’re not just sitting there like a fool if the stock happens to fall back all the way down to $80.00 or something. Remember a $10.00 move from 93.00 down to 83.00 is equivalent to a $70.00 move pre-split.
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