Okay, Apple is the monster stock of the last decade. It continues to dominate many tech sectors and even leaving the destruction of whole industries in its wake. One example is the compact disk as a product and the company Tower Records that was made obsolete with iPods and iTunes. We saw the iPhone storm the cell phone industry and now the iPad beat all comers in a whole new game that Apple practically invented. Now, the big question. We know Apple is an amazing company, it holds $400 billion in case reserves on its balance sheet and is still an amazing value for its growth rate. But when do we buy it? Now for a run at $500? Or will there be another chance to get in at a much better price?
Here are five great entry points for traders who want to increase their returns by actively trading Apple.
#1 Let Apple settle into a price base over the next several weeks. Likely a ten dollar range $455-$440, if the market is calm and we see this range hold then a trader could buy a break out to a new high around $455 for a new run into the next earnings.
#2 If Greece or the EU scared the market again with sovereign debt default becoming systemic, or the nay Sayers saying Apple is just to big to grow and they continue bashing it non-stop with rumors we may get a chance to buy it at either a bounce off the 50 day as support or after it loses the 50 day and then reverses and breaks out above it for an excellent buy point.
#3 If something truly wild happens to terrify investors and traders leading to the market having a huge re-tracement and our beloved Apple hits the 200 day moving average. This would truly be a gift of the trading gods. This is a great place to take on the biggest bet your risk management will allow and even use stock options for maximum leverage.
#4 For short term trend trading you could trade around the 10 day exponential moving average or 5 day exponential moving average using it as a signal to be long when it is above or in cash if it is below. Personally I do not short Apple.
#5 Identify a Darvas price box and buy when the bottom is reached and sell near the top. Since earnings it has been in a $443/$454 price box, so $443 would currently be a buy point until it is lost.
Investor have done very well just holding Apple over the past 9 years but traders can do even better with the right plan.