- Apple's financials are still in excellent shape, which means we do not recommend shorting the stock.
- However, Apple's product pipeline is not inspiring enough of a catalyst for gains from here.
- $100 is a major technical resistance which creates a split adjusted double top.
Apple's (NASDAQ:AAPL) stock has had a major rebound this year, but its facing steep resistance from it split adjusted all time high. The combination of a round number, negative technical momentum indicators on the weekly and monthly charts, and an uninspiring future product cycle makes a top of ~$100 per share appropriate. The iPhone 6 is likely to sell well, but not enough for the company to blow away expectations, and the rest of its lineup is not innovative to carve a new niche like the iPad, iPod, and iPhone have done in the past.
For more on my thoughts on the current state of Apple stock, watch the video below.
Apple's balance sheet and profitability measures in excellent shape with a 25% ROI, 21% net margins, and a fair valuation in terms of both is P/E and PEG ratios. As a result, we do not recommend shorting the stock. However, the bearish set up technically for the stock has me advising investors to take profits here and re-enter after a sizable correction or major breakout of previous highs. With the overall overvaluation of US markets, I think the downside scenario is more likely.