First, nothing is wrong with the company, I actually just bought a MacBook Pro and it is probably the most powerful and well-built machine I have ever had, so I also like the products, but products do not make you money in the stock market. All that matters is price, and if you are paying attention, the price of Apple (NASDAQ:AAPL) is ripe for a pullback.
First, the stock surged by 10% from the Thanksgiving Holiday week up until the announcement of the China Mobile deal on Thursday. If you don't think the news was expected, go back and look at what the stock did leading up to the news. Not only had the Street been wanting the China Mobile Deal for years, but they bought AAPL ahead of the news as well. We can never say for sure, but they seemed to know it was coming.
Second, the reaction to AAPL's stock price after the news was a dud. The stock did nothing, and if you were expecting a surge on the news you were definitely disappointed, but this is nothing new. AAPL tends to rally on rumors, and sell-off on news. Thus far that is exactly what has happened here. 'Buy The Rumor - Sell The News' is absolutely in effect.
Third, the stock hit our longer-term resistance level on Thursday, and that is a sell/short signal. It also tells investors to hedge their positions because AAPL now has the propensity to decline back to longer-term support as that is defined in our real-time trading report for AAPL.
Therefore, given the above discussion, even though Apple is a good company, even though I like their products, I realize that those feelings are not going to make me any money. All that matters is price, and this is definitely not the time to be buying AAPL.
If you want to see me debate this live, I did so yesterday on Fox Business News. Listen here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I have recommended to clients that they sell and consider shorting AAPL when it was near its recent highs, with a downside target of longer term support. That will also act as a buy signal if tested.
Business relationship disclosure: By Thomas Kee for Stock Traders daily and neither receives compensation from the publicly traded companies listed herein for writing this article.