What's Up With Apple's Downturn?

Apple (AAPL) shares are getting hit hard in today’s broad market selloff. While there are some minor news developments involving Apple - a lawsuit over the use of the phrase “Mighty Mouse,” a report that the company will use blue LED displays in future laptops - there’s nothing obvious that would be pressuring the stock.

One item worth noting which I missed yesterday: Piper Jaffray’s Gene Munster in an unusually cautious (for him) research note on Tuesday advised investors to keep their expectations for the capabilities of the 3G iPhone “in check.” He said the phone is likely to be nearly identical to the current iPhone in form and function.

Munster expects the new iPhone to be announced June 9 as part of the Steve Jobs keynote at the upcoming Apple Worldwide Developers Conference in San Francisco; he thinks it will start shipping shortly after.

Today’s downturn appears to be nothing more than profit-taking in an ugly broad market; if you have any other theories, pass ‘em along.

Comments

[bajaman2008:]

I had a trailing stop order in place that was executed at the first minutes of Tuesday's session. As I saw aapl pop up 5 pts, I felt that I had made a mistake, but in retrospect, maybe not. I am buying in again. Now that it is below 180, what does anyone on this blog think it will fall to. Or,....

2008 May 21 04:31 PM

[Ironcross11:]

I'm new to chart analysis but I'd say the overbought pressure as shown in Stochastics and BBs combined with the broad market to cause this well earned correction. If recent history is any indicator it will reverse tomorrow unless the broad indices continue to get plundered. I feel sorry for that guy that bought this morning at $188.

2008 May 21 05:43 PM

[InvestBaboo:]

Great stock battered for no reason other than "run for the hills!" mentality.

Will bounce back tomorrow at least 5 bucks. Great time to buy right now in the AH for either short term trade (at least 5 bucks per share profit) or buy and hold for the long term.

2008 May 21 06:18 PM

[Bill West:]

Just ugly market lemming run for the hills BS. Will buy some AAPL tomorrow for a quick momentum trade.......

2008 May 21 06:22 PM

[ari5000:]

needs to rest:

this ran back 50% -- won't be going anywhere for a while now. Either you were in or you weren't but hoping to get some cheap stuff and then watch it hit 190 is dreaming. Long consolidation period ahead. Not good for longs or shorts -- but net-net -- a lot better for shorts.

2008 May 21 07:23 PM

[wallawallab...:]

Panic in detroit and elsewhere.

Makes no sense. Fundamentals strong as steel.

America's (World's?) best tech company.

Tomorrow back up again. Can't waterboard this stock.

2008 May 21 07:37 PM

[HCWHunter:]

Agreed, makes no sense. I suspect that AAPL will continue up at least until June announcements, maybe even after if new products sound good. I've seen comments on some tech blogs about AAPL's marketing deals with (mostly) single carriers in each country being stupidly restrictive, but that guarantees AAPL monthly revenue over the term of the carrier contracts. AAPL also sells a bunch of iphones w/o a carrier contract that are later unlocked and resold.

HW

2008 May 21 07:57 PM

[seeksome:]

I bought in earlier in the year at $129.00 it hit my stop loss today I am at a quandry on what to do now because I think the stock lost it's momentum today,but I would not be suprised to see a run up to the June 9 announcement?To buy your apple stuff or anything else your heart desires visit:seeksomething.com

2008 May 21 10:58 PM

[nycDem:]

"Waterboard" comment is offensive...

2008 May 21 11:55 PM

[User 120461:]

This author is useless. How can you even muster out such title.
And what is the point of the article? Have you heard of post-earnings drift?

2008 May 22 12:35 AM

[yogatrader:]

yeah, how long have you been following this stock??

AAPL whips around. That's just what it does. No real reason, but here's one if you need it: It's widely held by hedge funds in lieu of cash, and on capitulation days it gets woodshedded. I see it at 250, just maybe 160 first.

Strategy: Buy way the f-ck out of the money calls in 09', read the Black Swan/ Fooled by Randomness and tune out for a bit.

Cheers,
yt

2008 May 22 01:15 AM

[TradeProfit:]

AAPL has awarded 10 millions new 3G iPhones start shipping in few days (June); this gadget will be a $1.6 billions tangible profit by using their net profit margin...bottomline is an contribution of net $2.00 EPS, plus ATT's profit sharing, if old iPhone sold out so quickly, the new one with speedier download of 3G must be better, I'll do bottom fish Today, and squeeze the short sellers, wish they don't cover soon so it will jump higher, big time !

2008 May 22 05:02 AM

[Linda:]

Briefing.com circulated a rumor that Steve Jobs is resigning, and yesterday afternoon this was posted on several AAPL stock trading boards. Don't you wonder who started that rumor? We were due technically for a retrace, having moved up from 115 to 192. And the whole market was pulled down yesterday. It'd be nice if it were over but it could go further down before it comes back.

2008 May 22 06:02 AM

[tom1234:]

aapl has entered the retail sales store business and has a sales result per sq.ft like no other retail store has ever reached ---in this economy when commercial real estate is down ---what a MIDAS TOUCH----

2008 May 22 09:08 AM

[20smoney:]

Theres nothing wrong with taking a profit...

my take: 20smoney.com/2008/05/2.../

2008 May 22 03:01 PM

[boris123:]

Commenters ought to know that Seeking Alpha editors, not the author, assign titles to these articles. I am sure Mr. Savitz would not have given it such a dumb title.

2008 May 22 03:31 PM

[imacademic:]

What could possibly be the inspiration behind a such a profound article? It's right up there with Sir Isaac Newton and his tale of a falling apple and
direction. Newton - mood contemplative- sat by a window,
watching an apple fall from a tree. He too, asked why; "why
should the apple always fall perpendicularly to the ground?
Why should it not go sideways or upwards?
I forgot what you said, but isn't it usually a no -brainer, there's profit -taking after earnings posted. Apple's destined to
hit $250, but not without
first going a little flaccid.
Indeed ( above post ) a Midas Touch.
Whattup with author? This article bites the big one, if anything!

2008 May 22 04:08 PM