5 Big Reasons To Sell Apple Stock Today (AAPL)

Blain Reinkensmeyer

Posted on Thu 22nd Jan, 2009 11:09:25 AM

  Email This Post

  Follow us on Twitter!

Apple (AAPL) alongside the rest of the big tech stocks had a terrible 2008 year and has started off 2009 without much to jump about until yesterday. After the bell Apple reported it earned $1.61 billion, or $1.78 a share, as sales reached $10.17 billion in the quarter that ended Dec. 27th. The stock is up 7% as of early trading but even with today’s price boost the iPhone makers future is bleak.

Some investors are looking at Apple’s stock today thinking this is “the time” to buy back in and watch the stock make a run back above $100 and beyond. Here are 8 reasons why that mentality is only wishful thinking.

Reason #1: The Market Sucks
75% of stocks follow the overall market trend and Apple is no exception. Even with a great future growth prospect and its dominance with niche products such as the iPod and iPhone Apple has not seen its ultimate price bottom. Any investor that believes the November 08 NASDAQ lows will be broken automatically is betting Apple’s $78.20 low from Tuesday, Jan. 22nd will also not hold.

Reason #2: Apple Stock Can’t Break its Lower Highs Pattern
Examine the stock chart of Apple further down this page to see the series of lower highs that have tormented Apple since October 08. Assuming this fresh earnings rally will end up ending prematurely it will be the sixth time Apple has attempted to create higher highs but has ultimately failed.

Reason #3: Steve Jobs Health
Every Apple investor whether they like it or not has Steve Jobs health on their minds. The stock has not fully discounted the fact that Steve Jobs may never return even though he says by June he will be back leading the company.

Reason #4: The 50 Day Moving Average Screams Resistance
By examining the 10 month stock chart of Apple below we can see that the blue line which is also the 50 MA is currently acting as extreme resistance for Apple stock. As it continues to downtrend it only puts more pressure on Apple investors and helps to push Apple shares closer and closer to fresh 52-week lows under $80.

Reason #5: The Recession Affects Everyone
Apple is in retail, and although it has a phenomenal product line investors have come to realize that no retailer is not immune to the current recession. The greats such as Wal-Mart (WMT) have struggled and until evidence supports an improving economy investors will have a hard time banking on the explosive growth Apple once saw quarter after quarter.

Thus even with investors over excited about today’s early surge from Apple the truth remains that they will utlimately be dissapointed as this rally like the others will eventually fail. Until the market finds its true bottom Apple’s stock will continue to struggle to move to its once higher ground in the $120+ range.