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Expert: Staying Away From Apple...In 2 Charts

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Market Technician and Eagle Bay Capital founder JC Parets tracks the movement and performance of the Dow 30 stocks, looking into the companies every week.

In the firm’s most recent Dow 30 report, he analyzes Apple Inc. (NASDAQ: AAPL) and arrives to the conclusion that this is “a great example of how expensive opportunity cost can get.”

The firm had a $129 price target for Apple (based on the 161.8% Fibonacci extensions from the 2012-2013 correction, and the November-January correction, illustrated in the charts below), which was hit three months ago.

“Had we ignored this level we would have been stuck in this name without making any money for what is equivalent to an entire quarter,” Parets explains.

Structurally Apple’s stock is in a robust uptrend, and hit Eagle Bay’s upside target in February. “In addition, momentum is putting in a bearish divergence at these new highs,” the report explicates.

Related Link: FBR, Bernstein Continue To Like Apple (And The iPhone)

“This continues to suggest taking profits until it digests these gains further and approaching this more from a tactical perspective."

An upward trending 200-week moving average and relative strength in a strong upslope, Parets sees little reason to be short, and says he would continue to wait for more information before acting on Apple again.

Short-term, Apple continues to struggle with the $129 level, so Parets prefers to stay on the sidelines. He concludes, “I would still stay away until we can see either further consolidation or a breakout to new highs out of this range.”

Posted-In: Eagle Bay JC ParetsAnalyst Color Technicals Trading Ideas

 

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