Buying Apple (AAPL)? Here are a few things to consider. (January 31, 2017)
AAPL
It’s January 31st and Apple ( NASDAQ:AAPL ) reported earnings after the bell, so lets get into the chart here. I looked at the headline numbers and they beat estimates. They didn’t blow the snot out of anything, but they beat estimates on some things. Other things not so much. I don’t care so much about that as I do what the stock does in reaction to the earnings release. The stock is up, so traders are buying this stock. Now, if you look at where these Bollinger Bands are, their trading bands, they are supposed to contain about 90, 91 percent of the price action. The stock is well outside here, so you would think that this stock can revert a little bit, it can gap up tomorrow and then sell back.
There are a lot of reasons why I don’t think that is going to happen. First of all, I generally don’t recommend buying a stock that is popping right at the open. In fact, actually, I never recommend that, it is just not a high probability trade. If you look, though, at Apple ( NASDAQ:AAPL ) you can see, this was a weekly chart, so this is the end of last week, the stock has gapped up now to a new high. So this entire pattern this one big, long, bold chop continuation pattern is now negated by this move here. So for the last year and a half or so Apple ( NASDAQ:AAPL ) has been carving out this sluggish, yucky range after being the stock that everybody loved.
I believe that this stock is likely to go up and test these highs. The way this is trading, the amount of time that this stock has essentially been consolidating, I think Apple ( NASDAQ:AAPL ) is poised to go higher from here. But my question to you would be the same one I have to me. Does that mean that I really want to buy THIS stock? Apple ( NASDAQ:AAPL ) is like huge, massive market cap. It is highly owned. Is there any smart money out there, that doesn’t own Apple ( NASDAQ:AAPL ), that is now going to say, “Oh, well now I will buy Apple?” My response to that would be, probably not. You are just not going to see the type of upward action on a stock like Apple ( NASDAQ:AAPL ), that traded 50 million shares today, you are not going to see this move in the way that a smaller cap stock will move.
So my suggestion is, don’t be buying Apple ( NASDAQ:AAPL ) at the open. If it is still above where the opening print is, 10 or 15 minutes later, then it is not probably not going to fall back; feel free to buy it. But that would be ONLY if you are okay with sitting around and watching the stock just kind of being sluggish for a while. This is not going to be a rocket ship. Don’t get sucked in because you are looking to relive the past. Everybody loved Apple ( NASDAQ:AAPL ) here, me too. This is not that, but it is likely going higher.
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