NEWS UPDATE: Use the overnight "Dip" after earnings announcement of yesterday as a buying opportunity. Technically we see the near term as what will be seen down the road as a classic "bear trap"...but wait until weeks end before pulling the trigger.
In what can only be described as what appears to be the perfect “blue sky” opportunity for Apple Computer’s stock to confound and amaze the same investment professionals who could not manage to get on board the history making climb from $85.35 back in Dec. 2008 and then staging one of the greatest bull market runs ever seen in the technology stock sector ever.
Apple Computers stock started a series of leaps of almost $100 per share. Agains all of the so called Wall Street stock picking experts. While the vast majority of the “tech” industry was suffer the toxic effects or shrinking margins and massive declines in sales on a global level. The Apple haters in the media and wall street media then ran screaming in the media about all of the reasons Apple Computers stock was over valued or why the company could not hold it’s price level after the death of Steve Jobs.
But lets take a moment to bask in the warmth of how wrong the so called wall street experts were.
March 2009.....Apple’s price jumps to 101.59. Then moves in an almost straight line towards a series of new all time highs. The breaks the $200 price resistance in Early October of 2009. Before mid October 2009.....Apple’s stock leaps to $314.74 !
Apples Stock then takes a rare breather before exploding through to produce a new historical yearly high close of $405. at the end of December of 2011. So from December of 2008 to December of 2011 only 36 months the price has now grown by a price level over 4 times the $85.35 back in 2008. But the best rally ever was now staged for the 2012 market.
Between December of 2011 to September of 2012 Apple Computers stock exploded almost straight up to over $700 per share.
This triggered a correction in Apples Stock price and if you were following the articles that I published during that period, then sold call options to capture your paper profits and hold on to your shares that were all purchased a dramatically lower price levels.
Now when the technical correction ended in a double bottom of 2013 in the months of April and June. All of which were made in the long term support level of $385 to $400 share price.....then you covered your call options and also added new longs.
But the good news for Apple Computer and it’s share holders is coming from all kinds of new directions. Apple Computer will soon make a reporting of earnings that will in almost all cases take wall street and most of the stock experts by surprise. New streams of profits from many directions on a global basis. But even more important is
a recent suggested stock buy back proposal by Apple investor Carl Icahn.
Now there seems to be disconnect inside the upper board of directors in understanding the massive benefit that Icahn’s suggestion.
Icahn is know for having a talent for finding companies that can take the step to the next level in terms of both profitability and growth. Just this week Icahn published a seven page letter to all shareholders that a yes vote on his proposal at the next Apple stock holders meeting in the very near future.
Icahn also announced that he has again put his money where his mouth is, and purchased another $500 million in Apple stock on Jan 23, 2013. This now brings his total holdings in Apple shares to about $3.6 billion. Carl Icahn also went on CNBC to state that his critical comments against Apple, are NOT for the directors and employees.
Rather for Apple’s board of directors.
Icahn firmly believes that the need for Apple to engage in his stock buy back program is a “no brainer”. Icahn argues that Apple’s stock that is currently at the $550 level would be priced at the “$840 area if it’s price earnings ratio was the same as the average P/E for the SP500 !
In a excerpt from his published letter Carl Icahn stated the following.
“it seems that to us that the basis of its argument against our proposal is that the company believes, because of the “dynamic competitive landscape” and because its ”rapid pace of innovation require(s) unprecedented investment, flexibility and access to resources”, it does not currently have enough excess liquidity to increase the size of its repurchase program.” Icahn’s letter went on to state. “Assuming this indeed is the basis for the company’s argument, we find its position overly conservative ( almost to the point of being irrational), when we consider that the company had $130 BILLION in net cash as of September 28, 2013 and that consensus earning are expected to be almost $40 billion next year (2014). Given this massive net cash position and robust earning generation, Apple is perhaps the most overcapitalized company in history,from our perspective”.
Apple’s earnings is scheduled for reporting monday afternoon of this week !
So if Apples stock was to break through the $850 level, we would expect to see a massive volatility spike and in the end see Apple stock create a squeeze against any possible “shorts”...then see an explosion towards the $1000 level.
Also I have advised that Apple Computers stock will soon be a “safe haven” for investors mostly outside the USA who are seeking to exit many of the unstable emerging markets who also have serious FOREX problems, incase you have not noticed.
Remember Baby....Trade or Die