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Stock Market Watch Starting February 21

|Includes: Apple Inc. (AAPL), GM

For the new but shorter than usually trading week, our top stock watch list includes both General Motors (NYSE:GM) and Apple (NASDAQ:AAPL) - two stocks that were also topping the headlines last week when correctly predicted that both would be making higher highs.

Starting with General Motors (GM), it surged almost 9% to above $27 last Thursday after reporting record profits of $7.6 billion - 62% above its 2010 net income. The news meant that 2011 was the first year since 2004 that Chrysler, Ford (NYSE:F) and General Motors (GM) have all managed to be profitable at the same time. On the other hand and while all automakers have reported higher sales, this could be due to having to offer more discounts to customers in order to produce those sales plus its worth noting that General Motors' (GM) stock still ended the week down 20% from its 2010 IPO.

Nevertheless, Bloomberg has reported that US auto sales per dealership could rise to a record this year thanks to both higher demand and to the stabilization of automakers' dealership networks after General Motors (GM) and other car makers shrunk and consolidated their dealership networks to boost the profitability of remaining dealers. Hence, this means that General Motors (GM) stock forecasts should have the stock heading higher in the near term.

However and over the long term, some analysts have expressed concerns that car makers like General Motors (GM) might be encouraged to boast and sustain car sales by adding to their dealer networks - reversing the profitability gains achieved over the past few years. In other words, keep General Motors (GM) and other automakers on your stock watch list while also keeping a close eye on both car sales statistics and how those car sales are achieved.

Finally, it's worth having Apple (AAPL) again on your stock watch list for this week. At the start of last week,'s Apple (AAPL) stock forecast correctly predicted that the stock would make a new high and break above the $500 level. However and later that week after surging to a 52 week high of $526.29 on Wednesday, Apple (AAPL) dropped below the $500 level on apparently unsubstantiated rumors that the Nasdaq 100 index would adjust its components to give the tech giant less weight. On Friday, Apple (AAPL) closed at $502.12 - still above the $500 level but not by much. Hence, it will be interesting to watch and see if Apple (AAPL) manages to stays above the $500 level for the duration of this week.

However and over the medium and longer-term, any Apple (AAPL) stock forecast could be impacted by new product releases along with growing concerns over China - specifically tussles over iPad trademarks there along with labor conditions at the factories of its suppliers with the later having the potential of turning into a PR nightmare for the company. Already, the Fair Labor Association (FLA) has reportedly uncovered "tons of issues" that need to be addressed at a Foxconn plant supplying Apple (AAPL) with many of its products.

In other words and over the longer term, keep an eye out for any embarrassing revelations - especially any news about Apple (AAPL) executives having known about any "issues" that are sub sequentially revealed. After all, investors with a longer memory might remember how labor issues turned into a PR nightmare for NIKE (NYSE:NKE) some years ago.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.