A Technician's Perspective On Apple's Record Valuation

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Apple Inc. AAPL crossed the $750 billion market cap mark recently. Although there are other companies with market caps in three digits, none at this point come close to Apple.

Things become more interesting when one contrasts Apple's valuations to that of all stocks traded in other foreign markets. The value of all listed companies in Mexico comes in at $525 billion and all listed companies in Germany comes in at $1.4 trillion, making Apple bigger than the entire Mexican stock market and more than half of German stock market.

Tom McClellan, editor of The McClellan Market Report Newsletter, was on CNBC Thursday to discuss what kind of impact such valuation has on the overall market and how a market technician approaches such a stock.

Vulnerability Of The Markets

“There is not a real great actionable conclusion you can draw from that,” McClellan said.

“But it's just staggering to think that this company, this great company that makes the little thing that you put in your pocket is worth as much as all the stocks and all the companies traded in Mexico.

“It's just a really a staggering idea and it points to the vulnerability that if Apple should stumble, what's that going to do to the entire U.S. market with such a big weight in all the indices.”

Related Link: 3 Reasons This Analyst Is Negative On Apple

Technical Look

When asked how a technician reacts to such a stock, McClellan replied that technicians “observe it and smile and think about it and then get back to the charts to look what the charts are saying.”

He continued, “And right now, we are seeing a turndown in Apple. That's what price oscillators and other indicators are showing that a little correction, which is ordinary and is merited, which seems to be beginning.”

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Posted In: CNBCMediaThe McClellan Market Report NewsletterTom McClellan
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