Tuesday, February 13, 2007

AAPL Core – Furthermore

Many years ago I dabbled in advertising for a little while and it is where I learned that you sell the “sizzle” not the “steak”. That premise remains true today.

About a month ago I showed an AAPL daily chart and I suggested that the DOJI printed on Jan 11th signaled a “maximum top”.

It obviously wasn’t “maximum” but it did turn out to be “close enough” and had you followed Baron Rothschild’s advice about “selling too early” you would have been out in time to miss the crash. Sometimes Marlyn knows what he is talking about. Certainly not as often as Jimmy Crack Corn Pone - but I don’t care.

The musical question today is - should I re-enter AAPL at this time. And I think the answer is no.

Here’s AAPL on the weekly chart and it looks good. It took all of the stress and pressure off that was built up through the week of January 8th and bounced off the EMA 21 last week very nicely. It even is forming a blow-off bottom (last two weeks lower highs, higher volume last week than week before, and a higher low yesterday) and if that continues through the end of this week I may change my tune.

But, and there is always a “but” - while there is certainly the potential for more downside – there’s neither a fundamental nor technical case for much upside. They already have the stores, they have the products, and they’ve already announced their new, expensive phone.

So the question really is - has all the “sizzle” been sold? It is possible that AAPL now becomes as much of a commodity as some old drug manufacturer, finds a narrow trading range, and stays there forever. Which is great as long as they continue paying that massive dividend.

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