Why The iPhone 3G Might Make Apple Inc. (AAPL) A Breakout Buy
Posted by timothysykes on Sun 25th of May, 2008 11:08:23 AM
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Now as you know AAPL isn’t my typical play, but since I’m awake 20 hours/day thinking about all potential profit angles, this one’s popped up on my radar. THIS 3G iPhone news has whipped the no-stock-market-experience-geeks into a frenzy as if they were strippers on coke and the usual stock-market-talking-heads are now running around as if they were about to utter something meaningful for once (nahhhhhhhhh, that’ll ever happen!), so I gotta interject. And remember, my word actually means something cuz not only is my trading account up 40% in the past 6 months, I nailed how Visa would perform (initial VMW-type price rise, but slightly more conservative, before quick drop off, seriously…months before its happened, read my article HERE), but most importantly, a few months ago before its 40% drop, I smacked all those AAPL cheerleaders with $300 price targets across their big fat fee-earning, research-lacking faces by urging caution at $200…see glorious article HERE)
Now I return to this playground because, thanks to this news, the upcoming price action might just turn out to be pretty damn predictable. All because, as with any new potential blockbuster product, people love to speculate on bigtime success…momentum buyers enter, short sellers exit and the stock breaks out to new highs before the new product even hits the shelves.
It’s called anticipation.
And with AAPL only $20 off its highs, it’s easily within range of a breakout and actually fulfill those cheerleaders’ $300 price targets. Unsurprisingly, those cheerleaders will get more vocal and actually help make their prediction come true, inevitably taking credit, saying they were right all along, you just needed patience.
Ah, the Wall Street game of hype, BS and self-fulfilling prophecies. You gotta love it and more importantly, you gotta profit from it. But make sure you wait for the breakout cuz until then, it’s just a triple top, rendering the talking heads and geeks useless.
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Other Websites Referencing This Post
- Manipulation Monday: Just 18 Stocks To Watch Today! | TIM - Timothy Sykes
- iPhone 3G Me This, iPhone 3G Me That, AAPL’s Breakout Attempt Goes Splat! | TIM - Timothy Sykes
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Good post, watched the live stock tv today and thought it was great. One suggestion would be, see if there is any way possible to make the focus on the green screen clearer. I know it might just be the technology but it would be cool if it wasn’t blurred the way it looks on screen.
thanks sonid, yes, that was just a test…every episode (which can be seen at http://www.mogulus.com/livestock ) is gonna be improved
Mike what is momo’s? And how do you get the intraday news?
I can jump on momo
im bearish on apple. i will turn bullish on the chart once it breaks 189-ish area.
but for now there is no setup for me that can be played so better just watch what levels it breaks or cracks.
All the variables are in place for APPL as a long, but I thought you didn’t go long…?!
Doesn’t this go against your rules?
Please explain.
Thanks.
sorry, small correction. i will be bullish when the chart breaks the 190-ish area.
this aint for me, waaay too expensive a stock for tim,,,its just commentary
So buy if it breaks above $200? I’ll be at the WWDC conference when it’s announced and I’d hate not to play AAPL if it goes to $240-300.
Well, the 3G iphone isn’t an entirely “new” product. After only a year, I doubt that too many people will be trading in their current iphone which they spent a lot of money on. Apple will need to give us a lot of reasons to do so. Whether or not the stock goes up or down will I think depend on these reasons, which are yet unknown - so the question is: what new features will the 3G iphone have? In addition to 3G capability, I think the most important improvements are: it better be faster on WiFi networks (cause right now it’s pretty pokey), GPS would be nice, and longer battery life. We should also expect some nifty software enhancements and maybe a 32GB model. An even better reason for the stock to seriously breakout - Jobs announces a new tablet-sized iphone-like device (think 8″ ultrathin notebook computer sans keyboard). So I agree, the best thing to do is wait and see.
well tim for the expensive stock, at certain points the risk level is incredibly low, making the risk-reward ratio pretty damn good even with leverage since your profits would on be inflated. at those certain points the price never looks back again, unless its a fake.
So if people were placing their bet on AAPL right now, what would it be? And what are your reasons? I think I’d be short given how far AAPL has run up the last few months and given that the 3G iphone is now old news.
i dont care about news or anything. pure prices and volume, almost like tim and his penny stocks only that i also have clear exit prices and can therefore expect a loss.
if you would place a bet now you would gamble. i agree on that with tim and most of the time moves are unpredictable in those big companies.
Yeah I wouldn’t place a bet now but I was just curious (since we’re talking AAPL, which is kind of a big deal) what people would do. It’s sort of like asking what your bet is for the superbowl, in which case you can’t really say “i’ll wait and see what happens”.
Alex, Having watched Apple as a company for over 20 years, and as an investment for about ten, I can say right now, that people should curb their enthusiasm. Having said that, it is not because of the 3G iPhone (more on that below), but because AAP is notoriously difficult to predict (accurately anyway). But, keep in mind, Apple dropped from $205 to $120 for just about no reason other than following the market, so there is no reason it can’t get back above $200. I jumped back in at $120 and I’m now up over $5000 (should be more like $6k, but I got stupid and tried to scalp, which didn’t work out so well..). I think Apple will continue to climb, but I’m not sure we’ll see a breakout over $200 even with the 3G phone announcement (though I really hope we do!).
Now for the 3G phone, although Apple devotees are some of the most loyal and most “must have the latest and greatest” patrons out there, I think current iPhone owners will only account for about 15% of sales. The biggest jump is going to come from the international market, where 3G networks have been available and waiting for this device for quite a while. As for software, all the wizz-bang will come when the iTunes app store opens in June and we can see what all those developers have been working on and what Apple has added to v2.0 of the firmware. As for hardware I would say GPS is highly likely, as is a 32GB model.
The street just doesn’t seem to get Apple, so as usual, disregard anything any ANALyst says. My guess is Apple will rise above $200 within the next month, but will settle and find support about $202. Assuming the market doesn’t see another January drop, Apple will finish the year at $225-$230.
As for a tablet, that rumor has been around so long, we may see Duke Nukem Forever before we see the Apple tablet!
What a coincidence! I heard one of the first mainstream games to be released to the new 3G is in fact Duke Nukem Forever! I must have built 1000 levels using the last game’s build mode. And yes, I was kidding about the first part:(
no its cuz i’ve got a lot going on and i’ll redo that PDO trade any day of the week, it was a good one risk-reward-wise. if u don’t understand that, then there’s little hope for ya
Forget Apple, too much buying power, unless your at millionaire status. If you didn’t get it early, catch the next train.
Let’s look to the future. Tim here’s a subject; What’s the plan for your first million $$?
Tim, what did you buy with your first million?
I want to start a restaurant business, some place with a different atmosphere to eat at. Next I would have to buy this http://www.autoblog.com/photos.....pt/579935/
And of course I will still trade!
Very nice new site. Kudos!
Just read about 100 of your blogs Tim, thanks your the greatest!
The AAPL announcements coming in a couple of weeks are going to be huge. The new software developers kit and exchange software is going to break down the corporate wall for an iPhone invasion.
Of the new software, keep an eye on the games! They are going to be huge! The game developers will be able to take advantage of the acceloramator, so think mobile Wii.
This is the time to get in, because you’ve got WWDC announcements, then back-to-school computer upgrades, then fall iPod revamp for the holiday season - right now is the quiet before the storm.
Fantom,
To answer your earlier question MOMO=Momentum.
Here
Fantom,
Here’s 2 more examples of MOMO:
Here
Thanks Mike, I’m going over some charts now. Their were some 52 week highs last week I want to short Tues.
Let’s make some money!
Hey Fantom,
Hope to see you one day soon in the new Audi! Wait for Tim’s Supernova patterns to unfold and you’ll be there before you know it. As for the restaurant, let me know if you have any questions. Here is the one I started a couple of years ago in Sarasota, FL. Great business = HAAARRRDDD Work! Hopefully the market will become your personal ATM for start up captal:)
Tim- go to sleep!
Wow, you out did yourself Evan. Next time I’m in Florida I’ll definitely look you up. I’m a newbie to shorting so I’m using the market gains as startup capital.
Evan save me a Rum Runner, drinks are on me.
I’ve been doing alot of research lately.
Mike how does he do that? Can you explain the candle to me?
someone please help me out on this. recently ive seen plenty of comments from fantoma dn mike. besides talking random stuff that has little to do with the overall purpose of the website (in fact it doesnt look like they are ever getting tim bucks??).
everyone probably knows how you can comment on youtube video and theres a lot of spam there as well, but since a few months the actual viewers of the videos can actually click a spam button and the entire comment gets hidden.
maybe it would be a great idea to have something like this on the webpage.
haters are fun, but careless spammers…those guys really gotta find something to do.
Oliver, every post I’ve written has been a question or I’ve brought something to the table. If you listen to Tim the purpose of this site is for education.
I suggest you bring something to the table instead of keeping it to yourself.
LOL
Back to business.
Mike I ran a scottrade scan and I look at the RSI of the stock, stocks that overbought 75% range I plan on shorting. Especially recent 52 wk highs.
Stocks in the oversold range I plan to go long.
I just went stockfetcher, is that formula the one for going long? Muddy is green.
You need to have the payed version of stockfetcher to get the scan results as far as i can tell. I only managed to get the first 5.
Ive brought my ideas on the table related to the post. what you are discussing should be discused in the forums. make use of them rather than confuse people with comments not really related to the hot topic discussed in the blog post.
hey what are the monday plays gonna be? I started to watch BEXP what do yall think
Goldstein22 we have to help Tim out. Yeah he’s giving us picks but there spoon fed. If were going to reach another level we have to put some work in. Are you doing your stock scans?
Thanks codyhof, what do you’ll think about shorting stocks with high RSI percentages?
VVUS is trading at a high from jan 04 and up around 35% on major volume and it seems as if it cannot take out the level. if it breaks the level it may turn out to be a good long if the volume goes with it. apparently its up on some obesity drug data in diabetics (i dont think the market will hold up on this BS).
on the other hand it might be worthy a short for around 7$ for about 50-60 cent max if there wont be a short squeeze in the morning. any thoughts?
(i couldnt post this in the forum probably due to a bug, it wouldnt recognize me as registered)
phantom, thats why i looked at bexp. its an exploration company that continues to create new highs becuase of rising gas prices. Look at the six/three month chart and tell me it doesnt look like a great position to watch
o ya, and vvus came up on my same stock scan
What else you got? I making a list for in the morning now.
new post:
http://www.timothysykes.com/20.....-inc-bdyt/
new post:
http://www.timothysykes.com/20.....t-from-it/
Oliver said:
“someone please help me out on this. recently ive seen plenty of comments from fantoma dn mike. besides talking random stuff that has little to do with the overall purpose of the website (in fact it doesnt look like they are ever getting tim bucks??).”
Here’s a dime Oliver,go buy a clue.
I’m up over 100% each month for the last 4 months,do you think I need or want Timbucks? HUH?
I’m sharing what I know and what has been profitable for me for FREE and I’ll bet that’s a hellava more then you know,in fact Tim asked me to be a guest poster here,he ever ask you that??
children, who cares who posts what some are more experienced than others, some have no clue, we’re all here to share our thoughts, i’ll delete any spamming/pumping, but other than that, post whatever the hell u want
Fantom
“Thanks Mike, I
Dear Erin Burnett,
I think you’re absolutely stunning. If you’re ever in Southwest Florida, I’d love to take you out to dinner and a movie.
Tim- thanks for giving me the “post whatever the hell u want” greenlight for my wooing of Miss Burnett- besides, if she’s Googling herself, you’re site’s bound to be pretty high on the list lately.
Fantom said:
“Mike I ran a scottrade scan and I look at the RSI of the stock, stocks that overbought 75% range I plan on shorting. Especially recent 52 wk highs.
Stocks in the oversold range I plan to go long.
I just went stockfetcher, is that formula the one for going long? Muddy is green.”
Fantom,
First of all I don’t know which time frame RSI you are using but for daytrading/short swings it really has to be RSI(2)imo.
Having said that if you are using RSI(2)be very very careful any stock that is RSI(2)ABOVE 90( especially if the candle is being PIERCED by the UBB.
Sounds strange but it’s true, contrary to what many say, RSI(2)above 90 at the UBB is a SIGN OF STRENGTH.
Examples are many but look at PDO on 4/18 at 4.75.
That’s the day it hit the RSI(2)scanner at a whopping 98.48
I’m not sure exactly what you mean when you said is that the formula for going long.
Sorry
Codyhof,
Yes to pull up Stockfetcher real time scans you need to subscribe.
It’s only 8.95 a month, the best bargain out there imo. You can run any scan of TA you can think of.
Everything I use is free,I pay for nothing
except SF,that’s how much I think of it
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