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Is Apple Inc. Headed To New All Time Highs?

|Includes: Apple Inc. (AAPL)

We all remember the story back in 2012, how Apple Inc. (NASDAQ:AAPL) was the "must own" stock which could do no wrong. Analysts were in love with it, they were all topping one another with upgrade after upgrade. Some were even slapping price targets of $1000. The stock did not disappoint as it kept climbing higher, day after day, week after week. Apple Inc. (NASDAQ:AAPL) was getting close to the $700 level and it became a matter of when, not if it would make new highs.

On Sept. 21 2012, Apple Inc. (NASDAQ:AAPL) introduced the much anticipated iPhone 5. People waited in massive lines across the world to get their hands on this hot item. The bullish sentiment was off the charts. That day the stock hit an all time high of $705.07, and topped out. From that day the bears took over. The stock price began a descent that would see a decline of 45%, before finally putting in a low of $385.10 on April 19 2014. During the decline, the bulls who once thought Apple Inc. (NASDAQ:AAPL) could do no wrong, were now piling in on the bearish side and avoiding the stock at all cost. Clearly the sentiment pendulum had swung to the overly bearish side from the drastically bullish.

Since putting in the low of $385.10, the stock has been in a steady ascent; up over 57% from the lows and has even reclaimed the psychological $600 level. This time, the rise of Apple Inc. (NASDAQ:AAPL) share price has been on the back of share buy backs, financial engineering and even a 7 for 1 stock split which will be coming soon. There has been no blockbuster product release, or cutting edge technological break through. Unless of course you consider buying Beats Electronics as product innovation, I certainly don't.

In reality the share price increase has come on the back of everything but new devices. So, one has to wonder, what will happen if Apple Inc. (NASDAQ:AAPL) actually starts to innovate and release new products? I am also noticing how the financial media is starting to come around on this company again. It is not the must have stock like it was back 2012, but you can definitely start to hear the drum beats slowly getting louder.

As I mentioned previously, AAPL was a great example of the sentiment pendulum as you can see by the large swings the stock has had. Smart traders have been able to take advantage of the great trades AAPL has presented, such as shorting the $700 top and then buying the $385 level. Understanding sentiment and how clearly it alerted of when to sell, and buy back AAPL is key to this and many trades.

Parm Mann

Elite Round Table