Apple cuts component orders by 10%? Here’s what happened to the stocks. (November 10, 2015)
Apple ( NASDAQ:AAPL ), Credit Suisse First Boston, I think they’re still first in Boston, they might be second, an analyst came out and said that Apple ( NASDAQ:AAPL ) cut they’re suppliers orders by about 10 percent. So coming into the 4th quarter, holiday shopping season, this and that, that’s kind of a big deal. As of yesterday the stock was just kind of drifting sideways. I’ve mentioned before that I’ve been bearish on Apple ( NASDAQ:AAPL ) for a long time; not because I know a darn thing about the fundamentals and all that stuff. But because one, two, really triple top here, or if you want to call this one it’s a “fourple” top, and then the stock drifted down.
So to me it’s not my prescient insight, it’s just this is the way the trend goes. But lately the way this stock has been perking up, and it had actually been rallying even in the face of bad news, bad market conditions. My sense was, do you know what? Everybody’s happy with Apple ( NASDAQ:AAPL ). Yippee ki yay, lets buy some stock, and then that was the way this thing was looking. By the way, the same thing with it’s key supplier Skyworks ( NASDAQ:SWKS ). Then out comes this report and you see this kind of pullback, 5 percent in Skyworks ( NASDAQ:SWKS ), just 3 in Apple ( NASDAQ:AAPL ).
So here’s the thing: that’s kind of a big deal, which is why this stock was down 3 percent. Apple ( NASDAQ:AAPL ) doesn’t typically trade down 3 percent in a day. So what do you do? First of all, just accept the fact that the stock is in a trading range. I have ABSOLUTELY no “dog” in this fight as far as whether I think the stock is going to break out or not. I don’t cheer for stocks. I don’t root against stocks, they’re just going to do what they’re going to do. And by the way, the reason I’m telling you is, because I don’t think YOU should either. So here’s my suggestion: as long as the stock is in the box here, as far as where it is right now, in the middle, it’s really not something that you want to buy.
Think about it this way, if the stock’s up near the top of the box, maybe you’re buying there, but what you’re really doing is anticipating a breakout. I would suggest just waiting for the breakout to occur. You’re not really missing that much. Oh, and if you’re saying “I’m going to buy this right now,” you could actually do that, because you know what? The stock could actually go a lot lower, somebody’s buying it, heavy volume. But you’re best bet, we’re just doing a flag here (I forget what nation this is, but I’m sure there’s a bunch of nice people there), wait for the stock to be pulling in to the green section. Right now, do you know where it is?
Guess what color I’m going to draw next? Yellow. This is where the stock is right now, and that’s just the way it goes. If you really want to just be trading the technicals and actually trading from a point of risk management, then wait for the stock to drop into the green box. Or, and this is a big or, wait for the stock to breakout of the top. If it breaks out of the top it’s likely going to continue moving higher. But right now it’s just kind of in “no mans land”; and track Skyworks Solutions ( NASDAQ:SWKS ) with it. They seem to be kind of trading together, and for obvious reasons right now, because Skyworks ( NASDAQ:SWKS ) is one of their big suppliers. So if Apple ( NASDAQ:AAPL ) cut their orders that would be why Skyworks ( NASDAQ:SWKS ) is down 5 percent.
But just know that right now both Skyworks ( NASDAQ:SWKS ) and Apple ( NASDAQ:AAPL ) are in consolidation. This is not an uptrend any more, look at the 200-day moving average, it’s trending sideways. Skyworks ( NASDAQ:SWKS ), 200-day moving average, just about trending sideways. So my suggestion on both of these is, these two stocks aren’t really where you’re going to make the most money. They always tend to be a high profile stocks. Skyworks ( NASDAQ:SWKS ), because they’re a big supplier of Apple ( NASDAQ:AAPL ). Apple ( NASDAQ:AAPL ), because it’s Apple ( NASDAQ:AAPL ). But you’re not going to be your making your money here, not right now. This stuff is in jail. Except it. Move on. Or just say, “You know what? I’m going to hold this stock, screw it. Lets do it, that’s all I’m going to do.
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