AAPL is trading up for the right reason, it is a fundamentally strong company, but the people buying their products are not fundamentally sound at all. Living off of credit or even worse, living off NOT paying their mortgage so they have extra cash to purchase AAPL products is not the ideal consumer for AAPL.
We want to start off by saying that Apple is a great company, in fact, this email is being written using an iMac. We love Apple (Nasdaq: AAPL), however, if one was to sell, now would be a great time to take some profits off the table in our opinion, so that you can potentially get back in later at a much lower price.
Now this is NOT an email calling for our members to short or buy AAPL ‘Options PUTS,’ the problem with bubbles is they are extremely hard to call the top. In fact, as we will note below, we feel AAPL fundamentally could see a much higher price. All we are saying is that in the short term, we see trouble ahead for AAPL. To put it simply, we feel that AAPL will see $420 before it sees $960. However, that doesn’t mean we don’t go to $700 first before seeing a much needed pull back.
Our suggestion is to watch AAPL for now. In order for AAPL to go down sharply, we are going to need to see a change in the overall mood of the market. For now, AAPL is setting the mood with every hedge fund in the world piling in their shares.
How much higher can AAPL go… A lot higher. If AAPL was trading at a Price-to-Earnings Ratio of 30, even if AAPL profits remained flat, AAPL could technically trade for over $1,400 per share.
With that said, we honestly feel that there are a lot of better places you can put your money than AAPL right now.
Now for the short term, AAPL appears to be entering a small bubble mania phase.
Mutual funds across the board are buying AAPL, even bond funds, small cap, mid cap, and international funds, everyone is buying AAPL. AAPL seems to be the only thing working.
We should note that AAPL pays no dividend, so when you start to see dividend funds own AAPL (Eaton Vance Dividend Builder Fund, Goldman Sachs U.S. Equity Dividend Fund, Cohen & Steers Dividend Value Fund, and Gabelli Dividend Growth Fund), something is definitely wrong.
AAPL market cap is now larger than the entire U.S. retail market.
The scariest chart of all for the short term is the 1 year and 6 month chart for AAPL
If you have ever wanted to see a real time parabolic chart, this is it! For those that can’t see pictures in their emails, just go put in the ticker AAPL and click 1 year chart.