NotVerySmart2

New Sirius Channel Line-ups Cause Stir

Hi All,

Gald to hear SIRI has survived earnings. Got absolutley slaughtered in AAPL, and have since taken a neutral to bear stance with a long straddle. I just don't know what to say about this market. Valuations, actual earnings, and reality seem to escape it. I sincerely hope that our current administrastion and G20 do something or I fear we may see Dow 6k-7k within the next few months. I strongly suggest nutral positions (hedge longs) as anything with a beta is going decline.

Good Luck,

NVS

Big Money Managers Are Cautiously Bullish - Barron's

In watching the price action late Friday afternoon (3 min. chart). I noticed a large sell off late in the day (typical), followed by a large buy of 1.4 M shares in the last 5 minutes, raising the price up to $108.29, then settling to 107.84 (not bad). This caused a “hook” to form on the MACD SMA (blue line) setting it to rise sharply above the LMA (red line) Monday morning. OBV says were at the beginning of another buy cycle. The Stochastic barometer indicates a short-term increase in price action is coming. Additionally, covered call ratings increase to 3 Keys, +15% next week indicated in futures. I wouldn’t be surprised if we saw $109 - $110 within first 30 Min of open.


For those TA’s interested, please review your charts. What do you think?

Barrington Stays Positive on Sirius

Hey Killer, how you doin'? Killin' I hope. : - )

NVS


On Nov 02 06:55 PM killerkaul wrote:

> NVS...................... ! !

Barrington Stays Positive on Sirius

Hmmmm......


NVS

Barrington Stays Positive on Sirius

BTW Covered call ratings up to 3 Keys on Apple. Indicates 15%+ upward movement next week.


NVS

iPhone: A Platform for the Masses?

This is a repost of my previous blog (please forgive the repetition), I have modified entry points as the key rating on calls has improved, I think the upside timeframe will be sooner than expected.


NVS


A Technical Analysis of Apple

Overview
I know many folks come on these boards claiming wildly higher prices with no justification other than plain speculation. I want to be clear that I will make some claims here that will seem incredulous, however I will humbly submit that I’ve done hours of homework and intend to justify my position with clear technical analysis. As a (mostly) technical trader (I prefer options), I make no real fundamental claims as to why these projections will be realized (I’ll leave that to others here), I only track the price action and momentum believing that the market will find ways to justify the inevitable outcome (e.g. “Good stocks find reasons to go higher, bad stocks find reasons to go lower”). I’ll also state that you should invest at your own risk and to make your own decisions as to how much risk you can afford. My final disclosure is that I am (very) long APPL calls (option positions set for positive price movement) and have a very bullish sentiment on this stock. With that aside, here is my opinion of APPL in the upcoming months.

Company Overview
Apple is a unique equity opportunity as the company has a significant cash reserve and consistent growth with a dedicated following in the consumer base. The beta being 2.62 implies that it’s volatility to market conditions is very high and thus it reacts to the overall market price movement in an exponential fashion. The market having recently bottomed (IMHO October 10th), is now looking for upward price momentum opportunities to recoup losses taken in the recent decline. Apple having a stable war-chest of cash and significant growth (26% this Q) presents a stable growth opportunity for investors in a market that has been relatively unstable. Apple (IMHO) also has a rather “cultish” following of investors as many high-net worth individuals can identify with the company and its ability to package and deliver products to market with such quality that they justify a premium price. Additionally, the recent release of the iPhone (IMHO) completely changes the landscape of mobile computing. With other companies releasing smaller cheaper notebooks (e.g. “Netbooks”) to offer a lower price point for consumers, they fail to realize that Apple offers the same capabilities (and a cell phone) for less than $200. I feel this revolution in mobile computing will be realized over the next year and then used for justification as to why the stock moved higher (for all you fundamentalists out there). Overall Apple is a very stable company with considerable cash-flows, and a significant cash reserve. This offers both immediate stability during uncertainty and the possibility of heavy growth in future earnings.


The Technical Analysis
The old saying “history repeats itself” is a mantra for technical traders. We analyze historical price movements and the technical indicators the preclude them. We then use this data to attempt to predict future price action to (hopefully) gain returns on our investments. It is clear to me that Apple is repeating a pattern seen during the last earnings season (please review AAPL from 01/08 – 05/08). The stock seems to dip significantly prior to earnings, then recover to about 85% of its prior value on the (mostly) good earnings news. Although the long term momentum is downward (consistent reduction in highs and lows forming a long term bearish triangle), the recent short term decline presents an opportunity for significant profits. We are currently at the bottom side of Apples rhythmic price action. The Fibonacci retrace indicates that the real bottom was $95 (I realize there were some short term deviations, this is insignificant noise in found in daily “panic” trading). The stock found support at this base ($95) forming a “swing point” during most of October 2008. We saw lows of $85, where critical historical resistance held up like a brick wall and highs of $110 where short term traders took profits. The recent trading range (up to earnings) established a “Bullish Triangle Reversal” pattern (minus low volume) that was simply awaiting a “breakout”. The short term low trending line (marking decreases in price movement) that started in early October was broken last week on October 28th 2008 (please refer to your charts). Although I realize this mimics a pre-earnings break out seen on October 13th, I would humbly submit that the 10/13 basing was a reaction to support levels ($85), and did not share the benefit of earnings growth confirmation. The recent rise in pricing is much different as the price has risen quite steadily (over several days) on positive volume rather than a sharp increase, then sharp decline where many traders find short term profits. The other significant difference of this recent increase is that the volatility index is reducing (rather than increasing) meaning that the price action of the stock is beginning to return to “actual” value. From October 10th to October 27th Apple was forming a triangular pattern derived from drawing a line (get a crayon) along the lows and another line along the highs. The significance of this pattern is that it indicates that investors are increasingly undecided as it swings above and below its mean value (IMHO $95). On October 28th Apple broke out of this reducing “swing pattern” at $104 and immediately rose to $112. In Technical Analysis we call this “breakout confirmation”. This fast increase in price movement combined with the bullish triangle formation and the historical price movement of 01/2008 – 05/2008, offers strong confirmation of future price action. The stock is returning to its long term mean of $125 bringing new highs in the $150 to $160 range over the next few months. Secondary confirmation of the mean can be seen on September 19th-29th as the stock found support in the $120-$130 range. Other technical indicators like the MACD, the Aroon, the RSI, the Money Flow, and the Stochastics offer strong proof that Apple has based, that the moving averages are moving upward, and that money flow is moving back into the stock. These signals combined with the recent break out lead me to offer the following predictions:

Apple Pricing Predictions:

11/15/2008 - 12/01/2008 - $122

12/15/2008 - 01/01/2009 - $150

Near Term Outlook
My feeling is that after these targets are reached, the stock will then stabilize for a few months and either resume its long term downward pattern or breakout of the pattern to find new highs. I will require more information and price action to make this determination. What is clear however is that at the current price of $107 the stock is significantly undervalued. I do see that some short term weakness (like Friday) may offer an entry point between $100 -$105, however I also see indications that the price movement Friday offered stability (a foothold) and that by Monday of next week we will be moving steadily higher.

The Hopeful Investor
My final commentary is that many investors that love this stock wait on the sidelines hoping for lower prices. I’m sure many of them will chime in and respond to this post negatively hoping to convince you otherwise. I would respectfully tell them that hope is not an investment strategy and that waiting for absolute lows (and highs) is sheer folly. As a Technical Investor you look to take advantage of 80% of the price action, risking 20% to short term volatility. These “hopeful investors” are the same folks that drive up the price dramatically as they panic to get in on the highs of the day and get burned by panicking and selling on the lows. Feeling disgruntled by their losses they come on these boards and trash the stock, then panic and buy in once the movement has already happened. They do eventually make money, but their short term lack of vision costs them 30% - 40% of what could have been made simply by trusting the technical indicators and ignoring the noise of short term movement. I can tell you this with full conscience as there was a time when I too was a “Hopeful Investor”. I have since learned (over 11 years) to trust what the indicators are saying, have faith in my decisions made calmly with the analysis, and not to be affected by the “drama” of daily movement.

Finally, the Conclusion
The technical signs are clear here folks. The stock is moving upward. I sincerely hope the data I have offered makes sense. I will be checking this post from time to time to answer any questions. I wish everyone the best of luck and hope you all take advantage of this opportunity to make money.


Take care,

NVS

Barrington Stays Positive on Sirius

SL62,

BTW your commentary on SIRI is superb!

Love to ya,

NVS

Barrington Stays Positive on Sirius

Hi there SL62,

Glad to hear your making out. Yes last week was AWESOME! Cleaned up un calls for AAPL and POT. I'm dumping the POT calls as I don't trust the underlying commodity prices, but the Apple thing is a once a year opportunity to cash in big. I doubled calls on the drift to $105 Monday moning, sold some @ $110 (15% profit on calls), then bought in again at $107. I suggest 100 -120 calls between Dec. and Jan. if you like options. Take care buddy, I may bring some CAP into SIRI if they make earnings happen. Let us pray... ;-)

I'll keep an eye on it,

NVS

Barrington Stays Positive on Sirius

Killer:

You're welcome buddy. I really mean the advice honestly. I have high six figures in myself, so I put my money where my mouth is. If you can get in under $105 consider yourself very lucky $106 - $107 would be a very fair. I wouldn't wait past Monday / Tuesday though, the inflection "pass" is indicated late Monday afternoon / early Tuesday morning, after which there will be heavy movement upward. Good luck!

Take care,

NVS

P.S. On SIRI, I should mention that the recent upgrade is really an attack on G/S. Goldman has a heavy amount of puts on (Dec 20th expiration), these other guys are doing everything they can to stick it to them. :-)

Who Will Win the Home Entertainment Battle?

My Technical Analysis of Apple

Overview
I know many folks come on these boards claiming wildly higher prices with no justification other than plain speculation. I want to be clear that I will make some claims here that will seem incredulous, however I will humbly submit that I’ve done hours of homework and intend to justify my position with clear technical analysis. As a (mostly) technical trader (I prefer options), I make no real fundamental claims as to why these projections will be realized (I’ll leave that to others here), I only track the price action and momentum believing that the market will find ways to justify the inevitable outcome (e.g. “Good stocks find reasons to go higher, bad stocks find reasons to go lower”). I’ll also state that you should invest at your own risk and to make your own decisions as to how much risk you can afford. My final disclosure is that I am (very) long APPL calls (option positions set for positive price movement) and have a very bullish sentiment on this stock. With that aside, here is my opinion of APPL in the upcoming months.

Company Overview
Apple is a unique equity opportunity as the company has a significant cash reserve and consistent growth with a dedicated following in the consumer base. The beta being 2.62 implies that it’s volatility to market conditions is very high and thus it reacts to the overall market price movement in an exponential fashion. The market having recently bottomed (IMHO October 10th), is now looking for upward price momentum opportunities to recoup losses taken in the recent decline. Apple having a stable war-chest of cash and significant growth (26% this Q) presents a stable growth opportunity for investors in a market that has been relatively unstable. Apple (IMHO) also has a rather “cultish” following of investors as many high-net worth individuals can identify with the company and its ability to package and deliver products to market with such quality that they justify a premium price. Additionally, the recent release of the iPhone (IMHO) completely changes the landscape of mobile computing. With other companies releasing smaller cheaper notebooks (e.g. “Netbooks”) to offer a lower price point for consumers, they fail to realize that Apple offers the same capabilities (and a cell phone) for less than $200. I feel this revolution in mobile computing will be realized over the next year and then used for justification as to why the stock moved higher (for all you fundamentalists out there). Overall Apple is a very stable company with considerable cash-flows, and a significant cash reserve. This offers both immediate stability during uncertainty and the possibility of heavy growth in future earnings.


The Technical Analysis
The old saying “history repeats itself” is a mantra for technical traders. We analyze historical price movements and the technical indicators the preclude them. We then use this data to attempt to predict future price action to (hopefully) gain returns on our investments. It is clear to me that Apple is repeating a pattern seen during the last earnings season (please review AAPL from 01/08 – 05/08). The stock seems to dip significantly prior to earnings, then recover to about 85% of its prior value on the (mostly) good earnings news. Although the long term momentum is downward (consistent reduction in highs and lows forming a long term bearish triangle), the recent short term decline presents an opportunity for significant profits. We are currently at the bottom side of Apples rhythmic price action. The Fibonacci retrace indicates that the real bottom was $95 (I realize there were some short term deviations, this is insignificant noise in found in daily “panic” trading). The stock found support at this base ($95) forming a “swing point” during most of October 2008. We saw lows of $85, where critical historical resistance held up like a brick wall and highs of $110 where short term traders took profits. The recent trading range (up to earnings) established a “Bullish Triangle Reversal” pattern (minus low volume) that was simply awaiting a “breakout”. The short term low trending line (marking decreases in price movement) that started in early October was broken last week on October 28th 2008 (please refer to your charts). Although I realize this mimics a pre-earnings break out seen on October 13th, I would humbly submit that the 10/13 basing was a reaction to support levels ($85), and did not share the benefit of earnings growth confirmation. The recent rise in pricing is much different as the price has risen quite steadily (over several days) on positive volume rather than a sharp increase, then sharp decline where many traders find short term profits. The other significant difference of this recent increase is that the volatility index is reducing (rather than increasing) meaning that the price action of the stock is beginning to return to “actual” value. From October 10th to October 27th Apple was forming a triangular pattern derived from drawing a line (get a crayon) along the lows and another line along the highs. The significance of this pattern is that it indicates that investors are increasingly undecided as it swings above and below its mean value (IMHO $95). On October 28th Apple broke out of this reducing “swing pattern” at $104 and immediately rose to $112. In Technical Analysis we call this “breakout confirmation”. This fast increase in price movement combined with the bullish triangle formation and the historical price movement of 01/2008 – 05/2008, offers strong confirmation of future price action. The stock is returning to its long term mean of $125 bringing new highs in the $150 to $160 range over the next few months. Secondary confirmation of the mean can be seen on September 19th-29th as the stock found support in the $120-$130 range. Other technical indicators like the MACD, the Aroon, the RSI, the Money Flow, and the Stochastics offer strong proof that Apple has based, that the moving averages are moving upward, and that money flow is moving back into the stock. These signals combined with the recent break out lead me to offer the following predictions:

Apple Pricing Predictions:

11/15/2008 - 12/01/2008 - $122

12/15/2008 - 01/01/2009 - $150

Near Term Outlook
My feeling is that after these targets are reached, the stock will then stabilize for a few months and either resume its long term downward pattern or breakout of the pattern to find new highs. I will require more information and price action to make this determination. What is clear however is that at the current price of $107 the stock is significantly undervalued. I do see that some short term weakness (like Friday) may offer an entry point between $100 -$105, however I also see indications that the price movement Friday offered stability (a foothold) and that by Wednesday of next week we will be moving steadily higher.

The Hopeful Investor
My final commentary is that many investors that love this stock wait on the sidelines hoping for lower prices. I’m sure many of them will chime in and respond to this post negatively hoping to convince you otherwise. I would respectfully tell them that hope is not an investment strategy and that waiting for absolute lows (and highs) is sheer folly. As a Technical Investor you look to take advantage of 80% of the price action, risking 20% to short term volatility. These “hopeful investors” are the same folks that drive up the price dramatically as they panic to get in on the highs of the day and get burned by panicking and selling on the lows. Feeling disgruntled by their losses they come on these boards and trash the stock, then panic and buy in once the movement has already happened. They do eventually make money, but their short term lack of vision costs them 30% - 40% of what could have been made simply by trusting the technical indicators and ignoring the noise of short term movement. I can tell you this with full conscience as there was a time when I too was a “Hopeful Investor”. I have since learned (over 11 years) to trust what the indicators are saying, have faith in my decisions made calmly with the analysis, and not to be affected by the “drama” of daily movement.

Finally, the Conclusion
The technical signs are clear here folks. The stock is moving upward. I sincerely hope the data I have offered makes sense. I will be checking this post from time to time to answer any questions. I wish everyone the best of luck and hope you all take advantage of this opportunity to make money.


Take care,

NVS

Share Buybacks Make Apple Sweeter

My Technical Analysis of Apple

Overview
I know many folks come on these boards claiming wildly higher prices with no justification other than plain speculation. I want to be clear that I will make some claims here that will seem incredulous, however I will humbly submit that I’ve done hours of homework and intend to justify my position with clear technical analysis. As a (mostly) technical trader (I prefer options), I make no real fundamental claims as to why these projections will be realized (I’ll leave that to others here), I only track the price action and momentum believing that the market will find ways to justify the inevitable outcome (e.g. “Good stocks find reasons to go higher, bad stocks find reasons to go lower”). I’ll also state that you should invest at your own risk and to make your own decisions as to how much risk you can afford. My final disclosure is that I am (very) long APPL calls (option positions set for positive price movement) and have a very bullish sentiment on this stock. With that aside, here is my opinion of APPL in the upcoming months.

Company Overview
Apple is a unique equity opportunity as the company has a significant cash reserve and consistent growth with a dedicated following in the consumer base. The beta being 2.62 implies that it’s volatility to market conditions is very high and thus it reacts to the overall market price movement in an exponential fashion. The market having recently bottomed (IMHO October 10th), is now looking for upward price momentum opportunities to recoup losses taken in the recent decline. Apple having a stable war-chest of cash and significant growth (26% this Q) presents a stable growth opportunity for investors in a market that has been relatively unstable. Apple (IMHO) also has a rather “cultish” following of investors as many high-net worth individuals can identify with the company and its ability to package and deliver products to market with such quality that they justify a premium price. Additionally, the recent release of the iPhone (IMHO) completely changes the landscape of mobile computing. With other companies releasing smaller cheaper notebooks (e.g. “Netbooks”) to offer a lower price point for consumers, they fail to realize that Apple offers the same capabilities (and a cell phone) for less than $200. I feel this revolution in mobile computing will be realized over the next year and then used for justification as to why the stock moved higher (for all you fundamentalists out there). Overall Apple is a very stable company with considerable cash-flows, and a significant cash reserve. This offers both immediate stability during uncertainty and the possibility of heavy growth in future earnings.


The Technical Analysis
The old saying “history repeats itself” is a mantra for technical traders. We analyze historical price movements and the technical indicators the preclude them. We then use this data to attempt to predict future price action to (hopefully) gain returns on our investments. It is clear to me that Apple is repeating a pattern seen during the last earnings season (please review AAPL from 01/08 – 05/08). The stock seems to dip significantly prior to earnings, then recover to about 85% of its prior value on the (mostly) good earnings news. Although the long term momentum is downward (consistent reduction in highs and lows forming a long term bearish triangle), the recent short term decline presents an opportunity for significant profits. We are currently at the bottom side of Apples rhythmic price action. The Fibonacci retrace indicates that the real bottom was $95 (I realize there were some short term deviations, this is insignificant noise in found in daily “panic” trading). The stock found support at this base ($95) forming a “swing point” during most of October 2008. We saw lows of $85, where critical historical resistance held up like a brick wall and highs of $110 where short term traders took profits. The recent trading range (up to earnings) established a “Bullish Triangle Reversal” pattern (minus low volume) that was simply awaiting a “breakout”. The short term low trending line (marking decreases in price movement) that started in early October was broken last week on October 28th 2008 (please refer to your charts). Although I realize this mimics a pre-earnings break out seen on October 13th, I would humbly submit that the 10/13 basing was a reaction to support levels ($85), and did not share the benefit of earnings growth confirmation. The recent rise in pricing is much different as the price has risen quite steadily (over several days) on positive volume rather than a sharp increase, then sharp decline where many traders find short term profits. The other significant difference of this recent increase is that the volatility index is reducing (rather than increasing) meaning that the price action of the stock is beginning to return to “actual” value. From October 10th to October 27th Apple was forming a triangular pattern derived from drawing a line (get a crayon) along the lows and another line along the highs. The significance of this pattern is that it indicates that investors are increasingly undecided as it swings above and below its mean value (IMHO $95). On October 28th Apple broke out of this reducing “swing pattern” at $104 and immediately rose to $112. In Technical Analysis we call this “breakout confirmation”. This fast increase in price movement combined with the bullish triangle formation and the historical price movement of 01/2008 – 05/2008, offers strong confirmation of future price action. The stock is returning to its long term mean of $125 bringing new highs in the $150 to $160 range over the next few months. Secondary confirmation of the mean can be seen on September 19th-29th as the stock found support in the $120-$130 range. Other technical indicators like the MACD, the Aroon, the RSI, the Money Flow, and the Stochastics offer strong proof that Apple has based, that the moving averages are moving upward, and that money flow is moving back into the stock. These signals combined with the recent break out lead me to offer the following predictions:

Apple Pricing Predictions:

11/15/2008 - 12/01/2008 - $122

12/15/2008 - 01/01/2009 - $150

Near Term Outlook
My feeling is that after these targets are reached, the stock will then stabilize for a few months and either resume its long term downward pattern or breakout of the pattern to find new highs. I will require more information and price action to make this determination. What is clear however is that at the current price of $107 the stock is significantly undervalued. I do see that some short term weakness (like Friday) may offer an entry point between $100 -$105, however I also see indications that the price movement Friday offered stability (a foothold) and that by Wednesday of next week we will be moving steadily higher.

The Hopeful Investor
My final commentary is that many investors that love this stock wait on the sidelines hoping for lower prices. I’m sure many of them will chime in and respond to this post negatively hoping to convince you otherwise. I would respectfully tell them that hope is not an investment strategy and that waiting for absolute lows (and highs) is sheer folly. As a Technical Investor you look to take advantage of 80% of the price action, risking 20% to short term volatility. These “hopeful investors” are the same folks that drive up the price dramatically as they panic to get in on the highs of the day and get burned by panicking and selling on the lows. Feeling disgruntled by their losses they come on these boards and trash the stock, then panic and buy in once the movement has already happened. They do eventually make money, but their short term lack of vision costs them 30% - 40% of what could have been made simply by trusting the technical indicators and ignoring the noise of short term movement. I can tell you this with full conscience as there was a time when I too was a “Hopeful Investor”. I have since learned (over 11 years) to trust what the indicators are saying, have faith in my decisions made calmly with the analysis, and not to be affected by the “drama” of daily movement.

Finally, the Conclusion
The technical signs are clear here folks. The stock is moving upward. I sincerely hope the data I have offered makes sense. I will be checking this post from time to time to answer any questions. I wish everyone the best of luck and hope you all take advantage of this opportunity to make money.


Take care,

NVS

Barrington Stays Positive on Sirius

Hi Guys, NVS here. I recently wrote an analysis of APPL, and althogh I don't want to spam here, I wanted to share my insgiht with all of you in hopes that you may find a way to recoup some of you SIRI losses. I posted this on severa Apple boards, I hope you find it interesting. Again, please forgive the intrusion.

Take care,

NVS

My Technical Analysis of Apple

Overview
I know many folks come on these boards claiming wildly higher prices with no justification other than plain speculation. I want to be clear that I will make some claims here that will seem incredulous, however I will humbly submit that I’ve done hours of homework and intend to justify my position with clear technical analysis. As a (mostly) technical trader (I prefer options), I make no real fundamental claims as to why these projections will be realized (I’ll leave that to others here), I only track the price action and momentum believing that the market will find ways to justify the inevitable outcome (e.g. “Good stocks find reasons to go higher, bad stocks find reasons to go lower”). I’ll also state that you should invest at your own risk and to make your own decisions as to how much risk you can afford. My final disclosure is that I am (very) long APPL calls (option positions set for positive price movement) and have a very bullish sentiment on this stock. With that aside, here is my opinion of APPL in the upcoming months.

Company Overview
Apple is a unique equity opportunity as the company has a significant cash reserve and consistent growth with a dedicated following in the consumer base. The beta being 2.62 implies that it’s volatility to market conditions is very high and thus it reacts to the overall market price movement in an exponential fashion. The market having recently bottomed (IMHO October 10th), is now looking for upward price momentum opportunities to recoup losses taken in the recent decline. Apple having a stable war-chest of cash and significant growth (26% this Q) presents a stable growth opportunity for investors in a market that has been relatively unstable. Apple (IMHO) also has a rather “cultish” following of investors as many high-net worth individuals can identify with the company and its ability to package and deliver products to market with such quality that they justify a premium price. Additionally, the recent release of the iPhone (IMHO) completely changes the landscape of mobile computing. With other companies releasing smaller cheaper notebooks (e.g. “Netbooks”) to offer a lower price point for consumers, they fail to realize that Apple offers the same capabilities (and a cell phone) for less than $200. I feel this revolution in mobile computing will be realized over the next year and then used for justification as to why the stock moved higher (for all you fundamentalists out there). Overall Apple is a very stable company with considerable cash-flows, and a significant cash reserve. This offers both immediate stability during uncertainty and the possibility of heavy growth in future earnings.


The Technical Analysis
The old saying “history repeats itself” is a mantra for technical traders. We analyze historical price movements and the technical indicators the preclude them. We then use this data to attempt to predict future price action to (hopefully) gain returns on our investments. It is clear to me that Apple is repeating a pattern seen during the last earnings season (please review AAPL from 01/08 – 05/08). The stock seems to dip significantly prior to earnings, then recover to about 85% of its prior value on the (mostly) good earnings news. Although the long term momentum is downward (consistent reduction in highs and lows forming a long term bearish triangle), the recent short term decline presents an opportunity for significant profits. We are currently at the bottom side of Apples rhythmic price action. The Fibonacci retrace indicates that the real bottom was $95 (I realize there were some short term deviations, this is insignificant noise in found in daily “panic” trading). The stock found support at this base ($95) forming a “swing point” during most of October 2008. We saw lows of $85, where critical historical resistance held up like a brick wall and highs of $110 where short term traders took profits. The recent trading range (up to earnings) established a “Bullish Triangle Reversal” pattern (minus low volume) that was simply awaiting a “breakout”. The short term low trending line (marking decreases in price movement) that started in early October was broken last week on October 28th 2008 (please refer to your charts). Although I realize this mimics a pre-earnings break out seen on October 13th, I would humbly submit that the 10/13 basing was a reaction to support levels ($85), and did not share the benefit of earnings growth confirmation. The recent rise in pricing is much different as the price has risen quite steadily (over several days) on positive volume rather than a sharp increase, then sharp decline where many traders find short term profits. The other significant difference of this recent increase is that the volatility index is reducing (rather than increasing) meaning that the price action of the stock is beginning to return to “actual” value. From October 10th to October 27th Apple was forming a triangular pattern derived from drawing a line (get a crayon) along the lows and another line along the highs. The significance of this pattern is that it indicates that investors are increasingly undecided as it swings above and below its mean value (IMHO $95). On October 28th Apple broke out of this reducing “swing pattern” at $104 and immediately rose to $112. In Technical Analysis we call this “breakout confirmation”. This fast increase in price movement combined with the bullish triangle formation and the historical price movement of 01/2008 – 05/2008, offers strong confirmation of future price action. The stock is returning to its long term mean of $125 bringing new highs in the $150 to $160 range over the next few months. Secondary confirmation of the mean can be seen on September 19th-29th as the stock found support in the $120-$130 range. Other technical indicators like the MACD, the Aroon, the RSI, the Money Flow, and the Stochastics offer strong proof that Apple has based, that the moving averages are moving upward, and that money flow is moving back into the stock. These signals combined with the recent break out lead me to offer the following predictions:

Apple Pricing Predictions:

11/15/2008 - 12/01/2008 - $122

12/15/2008 - 01/01/2009 - $150

Near Term Outlook
My feeling is that after these targets are reached, the stock will then stabilize for a few months and either resume its long term downward pattern or breakout of the pattern to find new highs. I will require more information and price action to make this determination. What is clear however is that at the current price of $107 the stock is significantly undervalued. I do see that some short term weakness (like Friday) may offer an entry point between $100 -$105, however I also see indications that the price movement Friday offered stability (a foothold) and that by Wednesday of next week we will be moving steadily higher.

The Hopeful Investor
My final commentary is that many investors that love this stock wait on the sidelines hoping for lower prices. I’m sure many of them will chime in and respond to this post negatively hoping to convince you otherwise. I would respectfully tell them that hope is not an investment strategy and that waiting for absolute lows (and highs) is sheer folly. As a Technical Investor you look to take advantage of 80% of the price action, risking 20% to short term volatility. These “hopeful investors” are the same folks that drive up the price dramatically as they panic to get in on the highs of the day and get burned by panicking and selling on the lows. Feeling disgruntled by their losses they come on these boards and trash the stock, then panic and buy in once the movement has already happened. They do eventually make money, but their short term lack of vision costs them 30% - 40% of what could have been made simply by trusting the technical indicators and ignoring the noise of short term movement. I can tell you this with full conscience as there was a time when I too was a “Hopeful Investor”. I have since learned (over 11 years) to trust what the indicators are saying, have faith in my decisions made calmly with the analysis, and not to be affected by the “drama” of daily movement.

Finally, the Conclusion
The technical signs are clear here folks. The stock is moving upward. I sincerely hope the data I have offered makes sense. I will be checking this post from time to time to answer any questions. I wish everyone the best of luck and hope you all take advantage of this opportunity to make money.


Take care,

NVS

Sirius XM Nears Top of Shorts List

BTW...if you own APPL, I could use some help on the thread here. Nothin but idiots and spammers. Thanks.


NVS (v2.0)

12 Promising Tech Stocks - Barron's

Stox2Buy..Isn't there a rule about spamming crap here? Don't go away mad...just go away.

NVS (v2.0)

12 Promising Tech Stocks - Barron's

Bullish pennant signal on APPL (break out at $100), anyone feel like buying? With a P/E under 20 (17.5 today), and new products that just kill the competition, I know what I want for Xmas....More APPL shares at $90 please!

NVS (2.0)