Apple with its massive market capitalization holds significant sway over the Nasdaq 100. Its monthly chart reflects a strong bull trend, with 63-day Twiggs Momentum holding above zero since early 2009, before a massive 50%+ gain over the last 3 months. Bearish divergence on 13-week Twiggs Money Flow warned of strong resistance and the stock is now signaling a correction.
Are we going to see a short correction followed by another surge, or is this a full-blown correction back to the long-term rising trendline? The daily chart already shows a bullish hammer candlestick, hinting at reversal.
When we break the day down into 30 minute candles, however, we can see retracement encountered a new resistance level at $575. Breakout would indicate a rally to $600, but not necessarily the end of the correction, while reversal below support at $568/$570 would signal another decline and test the lower trend channel around $550.
Surely it isn’t possible for any company of the size of Apple at $520B to increase in “value” by 50% in just 3 months. Are there any examples of this from the past where the value has been maintained over a long period? And, who is it that is pushing the price up? Seems like manipulation or “irrational exuberance”.
Price shouldn’t be confused with value. Price is dictated by the number of willing buyers v. willing sellers. Value is based on the long-term ability to generate earnings. Irrational exuberance can push price way above value. Microsoft is one past example:
AAPL closed down at $560. The correction continues.
CUPERTINO, California—April 24, 2012—Apple® today announced financial results for its fiscal 2012 second quarter ended March 31, 2012. The Company posted quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion, or $12.30 per diluted share. These results compare to revenue of $24.7 billion and net profit of $6.0 billion, or $6.40 per diluted share, in the year-ago quarter. Gross margin was 47.4 percent compared to 41.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.
Apple press release: http://www.apple.com/pr/library/2012/04/24Apple-Reports-Second-Quarter-Results.html