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Amar Daryanani
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I am a trader, stock market analyst and founder of Market Chart Analysis.com and BolsaMercados.com. These two websites cover trading opportunities based on Technical Analysis in America as well as Europe. My aim with these sites? I would like to share my market views with whoever is interested... More
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  • Will Apple Have To Return Its Crown To Exxon? 0 comments
    Jan 27, 2013 9:20 AM | about stocks: XOM, AAPL

    Apple - about to forfeit its throne to Exxon Mobil?

    Apple Inc. is about to lose its throne as the King of most capitalized companies in the world.

    AAPL has grown a lot in recent years becoming the largest company in the globe overtaking Exxon Mobil last 25th January 2012.

    AAPL has pulled back a lot from a high in September 2012 of $705 all the way to a low of yesterday of $450. The reasons are very clear:

    1.) The margin trading for leverage operations has been doubled from 30% to 60% throwing many traders out of the market

    2.) The decrease in earnings and profit margin in Apple's balance sheet has not been taken well by the investor market

    3.) The less demand on the iPhone 5 has forced them to reduce manufacturing orders to their suppliers so as not to hold excess of stock.

    This has created a snowball effect that has motivated many analysts in Wall Street to downgrade their view on Apple Inc., inclining their clients to other equities.

    Let's take a look at the Daily Chart that compares Apple (AAPL) and Exxon Mobil (XOM) courtesy of Stockcharts.com

    We can observe a very clear divergence between these two giants from January 2013, in which the oil company continues with its upswing while the tech apple starts to rot away.

    Yesterday we found out the market cap data of these two: Apple's presence in the market is worth 431 billion USD while Exxon is currently running a good 417 billion USD. The difference between them begins to shorten.

    If all continues at this pace, I wouldn't be surprised to see how Apple would have to return the crown to Exxon in a short time frame. Let's not forget that XOM has been around since 1889 and its core business is more necessary for the real economy than the technology giant.

    Happy Trading!

    (click to enlarge)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: market-outlook Stocks: XOM, AAPL
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