Is Apple Stock About To Crash?

I’m serious. Does it make you angry to read that? Do you feel like you’re doing something wrong going short America’s favorite stock? Is it a bad thing to wish awful things upon a company who provides us with such glorious technology?

Fortunately as market participants, we don’t have to care about any of these things. And yes, we are getting signals that $AAPL might be about to get clobbered. Check it out:

First of all, look at the daily and weekly charts of $AAPL making higher highs in price, but lower highs in Momentum:


Now take a look at how $AAPL is trading vs the S&P500. More scary looking divergences:

So based on these charts, we know there’s no way in hell that we would buy the stock here. So do we short the biggest and most awesome company in the world? It’s not a bad risk/reward with a stop above the highs that the bulls couldn’t hold on to. I’ll take a 1.5% risk with the prospects of a few hundred point correction any day.

Look at what the S&P500 looked like on April 4th:

Now look at the short-term $AAPL chart:

And the best part is that I don’t care about how many iphones they’re selling. I care even less about the $100B cash on the books. And the P/E ratio? My computer shuts off automatically if I ever type that in.

It’s all about finding good risk vs reward opportunities. And I think this is one of them.


Also See:

The ‘Instagram Top’ For Apple Stock (April 16, 2012)