Yes, of course, it’s AAPL. And here is another way to look at it.
Daily chart above, weekly chart below. If you looked at the weekly chart as though it were daily you would shrug your shoulders, hold the stock and get back to your golf game. This in spite of the fact it’s off 11% from the top. If you looked at the daily and started to sweat bullets (whether a member of the NRA or not) you have not learned the lesson of…gasp…MSFT. We did a study that is in several of our books on Microsoft using weekly bars and weekly Basing Points. The trade lasted 12 years. The people who sold when it was too expensive and didn’t remount frittered away (or booted away) a fortune. And suffered permanent psychic scars. We know, because we know at least one of them.
What is the lesson maestro? When you are sitting on one of the great trends of stock market history you must wring every penny from it. In the Microsoft case this was done by taking the long view with weekly bars. Of course… there is always…
the PnF chart which has a nasty forecast — 505??? 505!. Well taking the daily Basing Point (522) stop (495) even at 505 the trend has not changed. It has just made everyone’s nose bleed and given them the bends from g-forces. What about the weekly Basing Point? There isn’t one on this leg of any strength. What we are doing right now is making one. Like a tsunami, the force in one direction must be dissipated by a proportional counter wave.
Agonized cries from the abyss. Dante smiles as souls wail against their fate. So struggle. Buy puts. Sell calls. (Get an options guy to help you with this if you don’t have those skills.) This letter doesn’t recommend options — just strategies.
There is of course the Variant 2 of the Basing Point procedure where you take the low of the high day and use it as a Basing Point. In this case that is 600 and with a 6% filter the stop is 564. We don’t like this as much as Variant 1 (495) but we feel your pain.
Strange confession. We have been studying apple for at least fifteen years, own 8 mac computers, 4 iphones, and $750,000 (at least, probably more) of software and we have never bought the stock. Weird. Why? Well it’s kind of like when they asked Hemingway why he never got together with Marlene Dietrich, when it was obvious they adored each other. “Just never happened,” he said. Maybe this time it will happen for us.