Fallen: 7% Consider buying after: 15%?
In addition to the day to day jaggies that all stocks experience, AAPL also rides up and down on huge waves. These waves have a period of about 24 months, and they exist because of Apple’s huge market cap. (You can see what I mean very clearly, btw, on the accompanying 2-year chart.) Because of AAPL’s high price, it takes a while for companies to accumulate a large position, and it takes even longer for them to liquidate a position. Because nearly every institutional investor in the world owns some APPL, they act together to depress the stock price, even as they seek to get out at the highest price they can.
For this reason, we should expect to see more outflow from AAPL before the current round of rotation out of tech is over, but it can’t last too long this time, before AAPL starts to have a mind-blowingly low valuation that will pull in — strange as it may sound — value investors. If shares of AAPL fall to $130, I would pick them up with confidence.
Chart courtesy of www.stockcharts.com