Technical analyst: Apple is a 'pretty poor risk reward right here' (video)

"Where to begin?" asks friend-of-the-blog Bartley Yee.

From "Apple is a poor risk-reward: BTIG's Jonathan Krinsky" which aired on CNBC Friday:

Jonathan Krinsky, BTIG chief market technician, joins the 'Halftime Report' to give his technical take on Apple and what it means for the greater market.

Yee's take:

Where to begin?  So if I hear this right, he wouldn’t buy AAPL here because there isn’t enough reward (gain) for the risk of buying in at this price.  He still believes there’s a macromarket low to still be tested - I get that.  But there’s no reward for the “long term” (6-12 month or more)?  So essentially he’s really speaking to those who want to be in and out of the market by trading - essentially trying to time the market - get out when high, buy in when lower, and his technicals will show you this.

Sometimes I wonder if some of this is saying “if you didn’t see the lows like we did earlier this month (year), then it’s pretty much too late to eke out sufficient gain to make a move now, not enough upside near $154.  Better to wait for a new low (near $130?) so there’s plenty of upside to make an investment.”  Well, what about if/when AAPL pulls back to $144, $138, $134 or below?  When does one know where the bottom is?  That’s the problem with active trading, thinking you can outwit or time the market, and know when to buy the “lows” and sell the “highs”, not to mention the cash and tax implications if not in tax advantages or retirement funds.

The ironic thing is the slogan “past performance is not indicative or guarantee of future results”, yet this is precisely what these technical guys say all the time - we’ve seen this pattern before so we’ll look for the same patterns in the future to predict what will happen before it happens.

Well, we’ll see what long term holding (1-5 years) looks like at any entry points right here (15% below AAPL ATH).  I’ll lay odds that Apple thinks it’s worthwhile (to the tune of $22-24B buybacks this last and current quarter each, and Buffet buying more as well.

The ability to make a trade at these levels and simply sleep well at night, IMO, is much more satisfying and prudent rather than to spend the mental energy and time to monitor, time, and decide when to get in, out, trade, etc. stocks IF you are literally not a pro at it with defined plans of attack (see brother Gregg Thurman).  Us mere mortals at investing value companies and stocks like Apple/AAPL for the general market stability they are.

My take: Well, Krinsky is BTIG's chief market technician. Technical analysis -- like it or not -- is his job.

9 Comments

  1. Miguel Ancira said:
    I would buy more AAPL if I had the cash, but I do not because I already bought AAPL….enough said

    4
    July 23, 2022
  2. Fred Stein said:
    Well said, Yee. Thanks. Adding:

    If one incurs tax impact on your trades, these short-term trades make less sense.

    Other studies indicate that most retail active traders are subject to emotion, mainly fear of loss, which further hurts long term gains.

    Finally correlation is not causation. It has no real predictive power. Patterns tell us nothing about unpredictable factors, such as what Putin may do next, as just one example.

    Buffett get it. He buys Apple for the it’s ability to grow regardless of the unpredictable.

    3
    July 23, 2022
  3. David Emery said:
    “Technical ANALysts” should be honest, they are trying to model -human behavior-.

    2
    July 23, 2022
    • Steven Philips said:
      I still subscribe to your illustration’s thoughts on technical analysis. 🙂

      2
      July 23, 2022
  4. Michael Goldfeder said:
    Technical analysis is paralysis by analysis. Buy points, sell points, entry points IMO are for those who are unable to understand a company’s business and choose instead to make an informed decision based on nothing more than 50 or 200 day moving averages. Cup and handle formation, etc.

    I went to to a seminar all about technical analysis about 30 years ago and appreciate the information that was provided. But as with anything else in investing, it’s a tool, not a panacea for making decisions about what’s right for your portfolio.

    Just as many subscribers on this platform have stated that their decisions to purchase Apple were based on the return of Steve Jobs, or other significant leadership decisions undertaken by the company’s CEO’s that had nothing to do with a sterile technical approach.

    After following Apple for several years and embracing their products and seeing them everywhere I went, a buy point presented itself when the technical analysis dolts fled the stock back in late 2018. That’s called an “opportunity!”

    The Warren Buffet approach of: “Be greedy when others are fearful” has benefited me quite well in my investment decisions with Apple. As has all of the sage advice from everyone on this platform!

    Lurkers need to sign up as you are only denying yourself benefits to help you better understand this company through interactive zoom calls and the slack channel only available to subscribers.

    4
    July 23, 2022
  5. Gregg Thurman said:
    I think the worst of inflation is behind us.. Rising rates are doing their job, coupled with a grain shipment agreement between the Ukraine and Russia will reduce world tensions. The passage of time has enabled the EU to make new NG supply agreements to replace Russian dependency.

    Russia’s expansion plans have hit a very brutal wall, and exposed the Russia military as more of a paper tiger than a legitimate threat. Putin’s nuclear threat is so much woofing.

    These realities will grow, lessening inflationary pressures around the world (except in Russia).

    All in all I think the US economy is in great shape, all things considered,, and, should we go into recession, it will be shallow and short lived.

    Nothing goes up forever. I think a great deal of the pullback from January highs is a reaction to locking in profits exacerbated by media hyped negativity (bad news sells) that will prove unfounded.

    2
    July 23, 2022
    • David Drinkwater said:
      I think Tesla surprised the world in very much the same way this week. I bought in a while ago at $750, watched the insane limb to $1200, and then the crash. Pretty happy to have just ridden the wave and be where I am now at + $70 in under a year.

      There’s always gonna be noise. Sometimes you just have to tune it out.

      1
      July 23, 2022
  6. Hap Allen said:
    If I look out five or ten years, which horse am I going to put (or keep) my money on?

    0
    July 24, 2022

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