The fact that Tim Cook sold shares recently tells me Apple may have been on their way to missing on some numbers. It's hard for me to believe any CEO would sell right before blow out earnings. At least not as much as he sold (64 million worth.) The transaction occurred on March 26 2012 a little less than a month before earnings. I don't think it'll be a huge miss but you never know.
What I'm looking for.
Everybody and their mother was in $aapl and there's still a bunch in. Institutions and retail investors alike. This is a recipe for a major romp of the stock. At the same time there are deep pockets who would love to own every $aapl share. Earnings come out Tuesday April 24th, If price breaks 559 say 558 and closes below there Monday the day before earnings then somebody knows something. Maybe a bigger miss than expected and that miss would take us to 474 eventually and I would be a small buyer there with a tight stop. Truth be told price action up until now points to a miss on something, be it iphone numbers, macbook numbers, bottom or top line. Down 11% from it's high's some type of miss is priced in. The thing is it doesn't have to be a flat out miss. It could be a smaller beat than usual which for Apple is the same as a miss.
With no Steve Jobs Apple has to keep pristine earnings. Any doubt and selling could snowball and that would keep even the deep pockets that want the whole company at bay for a bit.
A flat out miss leads us to the scenario laid out above where we go to 474 I think. A smaller beat could be priced in at this point. If price get's crazy volatile but holds 559 say a week after a smaller earnings beat the stock is a buy. A beat that sends price above 620.25 is a flat out buy.
As for the rest of the market.
$aapl is a proxy for the rest of the market. It's the leader of the leaders. If you don't want to buy the best you don't want to buy the rest. Defensive stocks like utilities and industrial goods may do well but if your a small to medium sized investor it may be a good idea to just wait for a market turn around. That market turn around will coincide with an $aapl turn around. As stated above a $aapl close above 620.25 is an $aapl turn around and a green light to buy other stocks. If you know about major index follow through days that's even better because they remove any ambiguity. If you don't know about major index follow through days I can teach you but I have to charge. :-)
I'll blog on it but for the intricacies you'll have to sign up for premium content here. Same goes for drawing these Fib ratios and finding confluence zones. But if you follow me on twitter @soolebop I'll tweet it when I see a follow through day. After I've acted on it of course.
With all that said, if the European situation gets out of hand the small correction we're now having will get larger. These confluence zones are even more important in the event that happens. A buy off the 474 zone is sell @ the 559 zone as it will act as resistance the same way any broken support does. It'll be a "wait and see what price does" thing then. And if Europe isn't resolved you can look for price to react accordingly. This gives you a frame work to work with when chaos is abound. You can even sub divide the distance between these zones for minor support and resistance but that's another blog post along with the European situation. But I'll give you a buzz phrase or two. Listen for Spanish bank recapitalization or talk and more importantly plans to take bad assets off Spanish banks balance sheets. I've seen a headline speaking of the latter already this weekend. Anyway, be careful out here traders and until next time happy hunting!