Wednesday, April 24, 2013

AAPL Capitulation to Come

AAPL has revealed its cards.  It has given in to investor demands for increased dividend and is giving back cash to shareholders through a big stock buyback.  At the same time, they revealed no new releases till fall.  It sets up a period where investors have no positive catalyst, the only one being the increased dividend and stock buyback already being used up.  Now the investors realize there is nothing to look forward to.  Earnings are deteriorating, and still a ton of bagholders in the stock.  I expect a coming AAPL capitulation in the coming weeks, down to 350-360 area, where it is buyable.  Because the stock buyback will provide a floor for the stock at a certain point.  It is not worth the risk to short for the last capitulation move, AAPL will now support their stock with their buybacks, and there is still the bigger screen IPhone catalyst out there.  So I am looking for a long entry point lower from here for a strong dead cat bounce, back to 450, even though within a couple of years, I feel like AAPL will be a dinosaur and below 250. 

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