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Apple, Once Sweet, Now Rotten!
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


Click the play button to listen to the audio below:

Apple Inc (AAPL) is one of the companies that was discussed on 7-11-08 in the interview with Rick Waters on the Domain Show. This 3 minute audio clip describes the stock's failure to trigger a technical buy signal with the necessary institutional buying demand (the I criteria of the investment system) when it appeared to be positioned for another technical breakout.  Further, we go into the early technical signs of worrisome weakness as it did not find support at its 50-day moving average line (the red line), but sliced right through that important technical support level.  Additionally, the major averages (critical indicators to the M criteria) began a correction shortly after AAPL was featured in the June 2008 issue of CANSLIM.net News (read here). Based on weak technical action, AAPL was dropped from the Featured Stocks list on June 27, 2008 (read here). AAPL was first featured in yellow at $46.82 with an annotated graph on Wednesday, August 24, 2005 in the CANSLIM.net Mid Day Breakouts Report (read here).

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Under the headline, "Apple's Loss Has Very Little To Do With Jobs' Health", on Thursday, January 15th, 2009 we summarized some of the prior CANSLIM.net coverage on AAPL and showed decelerating sales and earnings growth and poor technical action with the above annotated graph. It shows exactly where and why it was dropped from the Featured Stocks list on 6/27/08, when it had closed at $170 per share. Now there is worse news, after its latest results (not shown) for the quarter ended December 31, 2008 revealed only a +6% sales revenues increase and only a +1% earnings per share increase over the year earlier period - clear fundamental evidence of more worrisome deterioration!  It now faces a tremendous amount of resistance due to overhead supply, which makes the stock unlikely to be a market leader in the near term.

A request from a valued institutional client (holding an open and profitable short position in the stock at present) prompted our team to dig up a copy of the following chart from 6/15/2004.  Take a look back in time to the days when AAPL was near the beginning of a 15-fold advance over 45 months!  In March 2004, one full year after the Iraq war began and the major averages had signaled a confirmed rally with a follow-through day, institutional investors were clearly accumulating its shares. Volume did not just barely limp over the minimum +50% above average volume threshold when it broke out, but instead, volume spiked up more than +500% as the price blasted to new multi-year highs. Investors who looked at its P/E Ratio of 70 may have easily made the mistake of assuming it was dangerously "overvalued" at the time. Quarterly sales and earnings increases were showing a drastic upturn, helped by the company's hot new iPod product.

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About Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net :
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen became a Registered Representative in 1987 and his career includes experience offering personalized assistance to investors with more than a decade of experience as a Registered Principal managing a branch office.

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.

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The recommendations made by CAN SLIM® Certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil + Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil + Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.

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