Time for Traders to Toss Their Apple Shares

by Sam Collins | September 17, 2013 1:41 am

Apple (AAPL[1]) — On Aug. 7, I said[2], “Apple stock has rallied close to its 200-day moving average at $474, where traders may be wise to nail down a profit. However, the stock appears capable of completing a long-term reversal from a saucer formation that could prove very rewarding for patient Apple investors.”

However, since then, analysts have revised earnings downward. The consensus estimate for fiscal 2013, ended in September, is $39.12 per share, down from $44.15 in fiscal 2012. And although the average estimate for fiscal 2014 is $42.50, some are indicating that this might be revised lower as well.

Technically, AAPL appeared to be establishing a bullish saucer formation. But the recent gap down from a double-top and the stock’s failure to hold above its 50-day moving average are not good signs. Thus, it’s best to sell Apple and wait for it to stabilize above its July low of $389 before exploring new positions.

AAPL Chart
Click to Enlarge

Chart Key[3]

Endnotes:
  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. I said: http://investorplace.com/2013/08/trade-of-the-day-apple-aapl-2/
  3. [Image]: http://investorplace.com/wp-content/uploads/2013/05/chart-key.gif

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