From Henry Suttmeier’s “Where To Buy Apple On Continued Downside Risk” posted Wednesday afternoon by Forbes:
Shares of Apple failed to hold its 200-day simple moving average at $159.70 on May 5. The downside risk is to its annual value level at $141.26. Blocking the upside is its semiannual pivot at $163.16. The weekly chart has been negative since the week of April 22 as a major warning…
If the stock stays below the 50-day and 200-day SMAs at $164.52 and $159.69, the downside risk and key level to hold is the annual value level at $141.26, which is the lowest horizontal line.
The higher two horizontal lines are the semiannual pivot at $163.16 and the monthly risky level at $173.50. If the monthly level falls below the semiannual level, a death cross will be confirmed.
The weekly chart for Apple is negative with the stock below its five-week modified moving average at $160.04. The horizontal lines are the annual value level at $141.26 and the semiannual pivot at $163.16. The 200-week simple moving average or “reversion to the mean” is at $97.23.
My take: “Death cross” is not nearly as spooky as it sounds. From Investopedia’s “What is a Death Cross?“…
The “death cross” is a market chart pattern reflecting recent price weakness. It refers to the drop of a short-term moving average below a longer-term moving average. The most closely watched stock-market moving averages are the 50-day and the 200-day.
Despite its ominous name, the death cross is not a market milestone worth dreading. Market history suggests it tends to precede a near-term rebound with above-average returns.
And this voodoo does not account for buybacks.
Some will exit due to emotion or the need to cover other exposures. Wise investors see Apple’s long-term cash flow potential, insurmountable technology lead, and disciplined management.
“… Buffett will be buying more shares while they are on sale.”
Oh, my, yes!
Arrr! Stay long and grow strong, me hearties!
Just give me a little-YOINK!
YOINK!
Looking at the daily / monthly average volumes taper down is incredible to review since buybacks kicked off.
Bullseye! Thanks for letting me know that someone else sees the profound impact buybacks have on volume!