Wednesday, February 25, 2009

Apple Computer Stock...The Reluctant Fruit

I posted a chart for Apple back in October 2008. At that time the chart was telling me that Apple stock could easily see a price of $40 or lower. That would be about $50 lower than the current price. I have no reason to change that view. However, Apple stock is still hanging in there around $100.

All the major North American stock indexes have either broken below their November lows or they are within a hair's breadth of doing so. The Nasdaq is the index that has the farthest to drop before that happens. It makes me wonder why.

Apple Computer's reluctance to join the next stage of the bear market appears to be one of the reasons for the Nasdaq Index having the farthest to fall. Even Microsoft has had the decency to join the bear party and break it's Nov. low. And, Microsoft has recently warned that their business will suffer during the bear market. Make perfect business sense to computers and the latest software are, in many cases, a luxury that individuals and businesses can postpone to save money. I would guess that Apple Computer will also see lower earnings with the drop in PC sales.

I still think the Apple will fall and we will see a large drop in the price. Based on what the rest of the market has done recently I don't expect we have long to wait before Apple breaks its November low. If that happens, as the Apple falls it will help bring the Nasdaq and other indexes to lower levels.

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