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Summary

  • 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.

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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.

Source: Double Top For Apple?