First of all let me defend this trade by saying that I’m like everyone else a huge Apple fan. I even run 4 30″ Monitors on an Apple Desktop (although I do use Boot Camp and Windows 7) And I think Apple is a very cheap stock and a fundamental buy. So this idea is really just a short-term trade and could provide some hedge in a bear market.
1. Apple flashing bearish RSI divergence on both daily and weekly charts. Recent run to $420 has over extended the stock technically. I attached the daily chart but the weekly chart shows bearish divergence.
2. iPhone launch Oct. 4 could underwhelm. First of all Jobs will probably not be there to launch it and No One is as good a pitch man with the exception of Warren Buffett.
3. Amazon new Kindle Fire (whatever it’s called) may steal some thunder from iPad.
4. The onslaught of price cutting Google Androids is cutting demand. U.S. could even be close to saturation for the iPhone and now we have a trade up market. Growth may slow . Note this chart from Business Insider.
5. The market is weak. Apple sells a high quality product on the expensive side of consumer purchases. People are running out of money and Apple could be running out of hits sooner than later. (caveat: the new Mac Air notebook is the coolest Apple product yet.)