Dubious advice: Dump Apple (video)

"Just a little too popular, a little too happy, a little too good." -- Carter Worth

From "Chartmaster's Apple warning: 'Sell it all'" which aired Wednesday on CNBC:

Carter Worth of Worth Charting has a big warning on Apple. With CNBC's Melissa Lee and the Fast Money traders, Guy Adami, Tim Seymour, Dan Nathan and Karen Finerman.

My take: What the panel is saying is that if you're long the stock and you think its current run might be over, this would be an opportunity to to sell a call or buy a put.

19 Comments

  1. Aaron Belich said:
    “Durr, it shouldn’t have gone up as much as it has!”

    How about, it should’t have gone down as much as it did… what we see here is the correction of that.

    11
    August 18, 2022
  2. Bart Yee said:
    All AAPL has done is retake the position it was in before the start of the Russian-Ukraine war which set off inflation and recessionary fears, an external event that pulled the entire market and AAPL with it. See his chart from prepandemic 2019 to now? There’s an almost linear rise, not steep, from then to now, excluding the pandemic and war related drops. This show that despite alll the headwinds, Apple the company keeps chugging along and growing it’s user base plus new users, and they keep buying products and services. Even if iPhone sales are flat at 220+M units, that would be considered very good in a tough environment. The stock reflects the company’s ability to handle obstacles and progress.

    Even with a short term slowdown due to inflationary impacts on discretionary income, every industry, every country, and every government is doing everything they can to counter inflation, and it’s starting to turn. If there’s no other black swans, and if Russia-Ukraine war grinds to a stalemate, the macroeconomic effects will lessen, especially if Europe can secure and maintain adequate offshore oil and LNG supplies (probably US and Middle East, Venezuela would love to have access and ability to service that market). Yes, Ukrainian foodstuffs and industry is hurting and affects other countries, but importers are adjusting.

    If headwinds slow or abate, Apple will continue to be there when consumers feel ready to spend again or spend more. IMO, the US and some Chinese consumers are already ready to spend. Pampering one’s self after enduring difficulty is a small perk, assuming you can afford it, or you need it.

    6
    August 18, 2022
  3. Bart Yee said:
    If one looks at a 5 year chart, the trend line is even more striking, AAPL is exactly where it should be on linear long term growth over time. I dare say I agree with Ives that a $210-220 August-Sept 2023 price target (26% upside) is eminently doable if no black swan external events. And even with black swans, buy the dips, know Apple & AAPL will weather better than most, and recover better than most. Safe haven.

    If you’re looking at income, follow the options leads of some PED FOBs, either way, there’s positive ways to use an AAPL investment.

    5
    August 18, 2022
    • Bart Yee said:
      AAPL is now reaching the general predicted levels of rise (~$180) by Sept. 2022 that the line points to. Why? Because Apple runs its business with long term goals in mind, steady revenue production, new products and services to keep adding to said revenue, and has / creates demand for its products and services through thoughtful and valued engineering and customer satisfaction.

      That is the missing part of technical chart analysis – why did the chart go where it did, and how did the company, not the traders, respond. Because ultimately, the company’s fundamentals will win out over trader sentiment in the long run – 6 months to a year.

      Sell it all? Trader mentality. Why? So you can try to time the market’s and Apple’s fall? And then buy back? In the midst of everyone and every government trying to reverse the slide, inflation, and preventing a recession? Is he hoping for one or two more good dips just because Apple’s slope is “unnatural”? Then don’t just sell it all, short it!! Don’t be so wishy washy!

      4
      August 18, 2022
      • Eric Lambeth said:
        Excellent comments as usual Bart
        Ericinaustin

        3
        August 18, 2022
        • Robert Stack said:
          I agree with you Eric. Bart is really on a roll these days with some really insightful comments on recent posts. Thanks Bart!

          Not to short any of the rest of you regulars. 🙂 Just sayin’!

          2
          August 18, 2022
  4. Fred Stein said:
    Here’s an alternative view on why Apple has gone up so fast lately. No sellers, only buyers.

    In that view, the recent lower trading volume represents strength. And why would anyone sell? They would have to pay taxes and then find a better investment. So given all the macro concerns, finding a better investment seems challenging.

    And finally so what? So what if the stock goes down a bit for a while? It has zero impact on a 5 year target.

    9
    August 18, 2022
  5. Miguel Ancira said:
    I have an idea…..dump Carter Worth…..

    9
    August 18, 2022
  6. Daniel Epstein said:
    Plenty of reasons for Apple to be rising at this time of year after falling earlier. The people who aren’t impressed by Apple’s business model always find something to worry about. They don’t think Apple earns a premium PE to the SP500. They have no problem thinking other companies do. They use growth numbers I don’t agree with to be negative as well. Carter Worth and his charts in my memory has called Apple’s short term path wrong on more than a few occasions. I would say I find it a stretch for Apple to break out to new highs soon without some product news that I don’t expect. Could be a buy the rumor sell the news set up for the next few weeks. The options advice they give still might be useful.

    1
    August 18, 2022
  7. Jeff Galanti said:
    Technical analysis is pure alchemy. It completely ignores things like sentiment, interest rates, macroeconomic conditions, etc.. It is very easy to look in the rear view mirror, draw some lines and throw out buzz words like resistance, death cross, etc. I would love to know at what rate Carter Braxton Worth has compounded his own money. Surely, he should be well exceeding the S&P 500 based on these profound insights.

    4
    August 18, 2022
  8. Gregg Thurman said:
    An upward slope such as AAPL has printed since June requires immense discipline on the part of buyers. Retail doesn’t have that kind of discipline, only the institutions.

    When institutions go on a buying streak they nibble, so as to not push prices to high to fast.

    As to Worth: over the years we’ve seen several doomsayers advising us to sell everything. Where are they now? Does anyone even remember their names? Worth is just one more in a long, skinny line.

    3
    August 18, 2022
    • Fred Stein said:
      Thanks for the insight, Gregg. Follow up question – Should we expect institutions to accumulate AAPL in order to look good at the year end?

      By ‘look good’ I mean both performance, and the optics of owning the name.

      1
      August 18, 2022
      • Bart Yee said:
        @Fred Typically Wall Street funds’ window dressing starts in November and ends before Christmas holidays where all fund managers spend time in the Hamptons. Meanwhile, home finance managers are rebalancing their portfolios, doing some tax harvesting, finishing RMD’s, and planning local Christmas parties and gatherings. I would hope they already snapped up some AAPL stock in the last quarter and now so that their brokerage account can give them some Christmas cheer as well as a new Apple product, service or gift card under their tree.

        0
        August 18, 2022
      • Gregg Thurman said:
        Fred: The institutions have been nibbling since June with no end in sight.

        I think they will slow down just shy of all-time high and hold until September launch and October earnings.

        Save more unexpecteds as we had earlier this year I see $200 by January earnings., certainly by April earnings

        That’s about where consensus was last January. This January there are several million fewer shares outstanding, Buffett has increased Berkshire’s stake dramatically, installed base has increased materially, Apple has proven itself immune to traditional headwinds, etc.

        2
        August 18, 2022
      • Aaron Belich said:
        No, they are going to sell / option their gains and collect their annual money-hats when Apple’s Press Releases start dropping this fall.

        We see it damn near every year… like clockwork. They’ll stop pocketing gains, and start buying up in November again.

        0
        August 18, 2022
  9. David Emery said:
    You can save money when compared to ‘chartmaster’ subscriptions by just buying your own Magic 8 Ball….

    3
    August 18, 2022
    • Fred Stein said:
      Yes, and you can save a lot more by not following his advice.

      2
      August 18, 2022
  10. Michael Goldfeder said:
    He so desperately wants to be relevant along with his family of charts. Sounds like a petulant child demanding to eat something else at the dinner table. I’m sure Warren gagged on his cherry coke if he was watching this animated how to trade Apple stock silliness.

    1
    August 18, 2022

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