Reports of Apple’s death cross are premature

From Brian Stelter’s Reliable Sources daily update, posted late Tuesday:

Watching the FAANG stocks: “For the first time, all five FAANG stocks are in bear markets,” MarketWatch’s Tomi Kilgore writes. Apple was the last to arrive there on Tuesday. Google entered a bear market on Monday. Now there’s lots of “death cross” talk and worries about the rest of the year…

death cross

My take: I don’t know a death cross from a death star, but I can draw the moving average chart for Apple. Looks to me like the stock has a ways to go before it catches up with Facebook, Netflix and Google.

death cross

5 Comments

  1. Robert Paul Leitao said:

    When irrational behavior grips the market, any excuse will do. Attempting to find reason in a market rout is akin to attempting to find and gather a dozen white cats in the midst of a blizzard.

    Fear and perceived uncertainty are powerful short-term influences on a share price. As Jeff pointed out in a comment above, chartists will tell you tomorrow why they think the market did something yesterday. It’s a fool’s game. Even worse is attempting to track Apple product sales by the forward guidance of a half-dozen suppliers out of hundreds of component makers. It’s akin to reading tea leaves.

    The fact is, Apple had guided to record revenue. We all know Apple doesn’t sell cheap iPhones. The company won’t risk customer relationships by slapping a low price on outdated technology. More important than unit sales in any particular quarter or fiscal year is an expanding global base of device users and providing developers with the most robust environment possible for the delivery of advanced solutions and services.

    What we claim to appreciate most about Apple’s global eco-system and product platforms is not sustained by selling low-priced products. Apple is delivering the most advanced handsets on the market and the most advanced eco-system of solutions on the planet while striving to protect user privacy. Sacrificing short-term, low-margin unit sales for the sake of the eco-system is sound business. Sacrificing quality and choosing to parlay the brand name for the sake of short-term gains in product sales would be an unmitigated disaster for Apple and of no real value for the company’s customer and shareholders.

    Apple today is no less successful as an enterprise than it was one month ago. While market routs are unpleasant, they do create opportunities for long-term investors. It also means Apple will be repurchasing far more shares now with the same dollars than when the share price was at its peak.

    Apple is now trading at prices last seen in early May. There’s nothing wrong with Apple and there’s certainly nothing wrong with rational investors taking advantage of irrational market behavior. This is how long-term profits are created.

    5
    November 21, 2018

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