Apple has been getting beat down for months now after the iPhone 5 and their latest earnings have disappointed. The stock is currently down over 180 points since the new iPhone made it's debut. If you do a simple twitter search you can see how many people are shorting the shares to death. The selloff is clearly overdone, but where should AAPL be trading? Personally I believe it should be at our around $625-640 right now.
Sometimes sentiment and technicals can be pretty misleading. If you are a trader looking for quick gains I can't tell you what to do with this one. If you are an investor I think there is no better time than now to buy. A lot of people say Apple is refreshing too many products at the same time and leaving nothing for next year. We don't know their plans for next year. They may have completely new products in the pipeline including a tv.
Apple is scheduled to report earnings again in late January. Here is what I'm expecting and why:
1) I think Apple will blow away current estimates
2) 50 million iPhones sold? Maybe not, but it's not important
3) I see Apple stock surging and making new highs after earnings
Why?:
1) Apple guided down in their last report, and expectations are low
2) Apple hasn't had so many hot new products available during the holiday quarter for as long as I can remember. With or without 50 million iPhones sold I picture this being a record setting quarter for the company
3) Lots of short covering!
Apple is all-in on this holiday quarter by refreshing basically it's entire lineup. The investor sentiment is ridiculously low along with the current stock price. I am going all-in on Apple stock tomorrow! There may never be another opportunity quite like this to buy.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.