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Is it too late to buy AAPL?

Updated on 2012-09-28 by Guest

Who doesn't know AAPL? From late of July, it was valued just at $570 and on 19 September 2011 AAPL was valued at $701.91 per shares or up $131.91 (23.14%). After moving that much, you might question, is it still worth it to buy AAPL? Or is it already too late to buy AAPL?

Personally, I think AAPL still can do more and I backed my thinking with:

1.      Sales and earnings growth keep growing strongly

Above are tables that showed sales, income and stock price growth, counting from year 2002 to 2011 we can see AAPL income growth shooting to the moon leaving sales and stock price growth behind.
2.      The problem of iphone 5 release mostly come from supply limitation, not the product itself, means the market love the product, but the company needs to work on the supply chain.
3.      AAPL notebook market share has increased from 62 percent to 68 percent last year and keep growing.
4.      As of 2003 AAPL had no debt
5.      Competitor as Android or other windows base phone might chip away company market share, with their super low cost phone, but that is short-term problem with iphone still winning with innovations.
6.      With current P/E of only 15.8 compared to GOOG, which has P/E of 22.2, the company stock price surely still has room to increase.

Technical Analysis

The chart above is daily chart for AAPL, from technical analysis point of views; there are several things I can consider for AAPL in the daily chart:

1.      Price making higher high and higher low, which mean AAPL, is in uptrend.
2.      Price above moving averages 50 and 200 means AAPL still in uptrend

Why we don't want to buy AAPL:

1.      Psychological big number at $700
2.      RSI almost enter overbought area
3.      No Significant pullback yet after strong bull movement started from end of July
4.      There is indication of divergence in MACD

I look again carefully to the weekly chart of AAPL, and I can see a really big storm is brewing; a short glance AAPL has high probability going down in few weeks. Why I think AAPL will go down?

1.      Both MACD and RSI is making divergence pattern with price
2.      AAPL is at good place to short, and that is big round number of $700 in price
3.      If this week closed at current price, it is evening star pattern and it is bearish

The odds are good because divergence pattern followed by candlestick pattern make a killer combination, and I think all of the traders around the world are watching this pattern.
Talking about bearish probability, I also need to mention why AAPL still bullish:

1.      It is moving above all of the moving averages
2.      Price still making higher high and higher low
With all the fact, I think AAPL still a good buy and the most conservative strategies to benefit from this is to buy on weakness, but we must wait at good demand area, from all of the fact, now I can define plan and strategies:

1.      I can buy AAPL when it come down and retest the moving average of 50 around $530 - $550
2.      If the movement really strong, I think AAPL might touch $400 - $420 area and at this place, I won’t hesitate to shot most of my bullet.
3.      I can try to short this stock for short term, but I want to be really careful because this strategy is high risk, might as well use put option.
4.      Ignore to buy AAPL if the stock create new high and wait for significant correction of price.

From the entire plan, I prefer to wait and use plan 1, 2 and I advise all of you avoid plan 3 as it is recommended to veteran only.

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