Wednesday, May 23, 2012

Why I like $AAPL

I have been consistent during all the aapl sell-offs that the sellers will end up needing to buy again shortly. My thesis? simply put this is a company that sells every trinket it makes at a premium, and ALL those who don't own its trinkets want them (all except me perhaps). I can take a risk on a long bet here.

Although I am not a technical analyst, I do look at the technicals to gauge my thesis.  

Here is the CCI w/trigger signals; it has been a pretty straight forward indicator for me. Though it's not a guaranty (as direction can turn on a dime), the CCI can be clear as to when NOT to buy. Looking at the bottom right, I circled where it's approaching zero which should be a buy signal. If the market takes a tumble off Eurozone disaster then all bets are off for the short term. Mid to long-term, I am a strong believer that aapl will be worth more in the future than now! I am long it via credit put spreads. As a hedge (to guard against short term drops), I have small out of the money June credit call spreads (may close those soon).
BOTTOM LINE: If I can't take a risk on a company that sells out of everything at a premium AND has a zillion dollars in cash AND pays a dividend THEN I should pack it in and stuff my money in a .25% CD!

Definition of 'Commodity Channel Index - CCI' from investopedia

An oscillator used in technical analysis to help determine when an investment vehicle has been overbought and oversold.  The Commodity Channel Index, first developed by Donald Lambert, quantifies the relationship between the asset's price, a moving average (MA) of the asset's price, and normal deviations (D) from that average. It is computed with the following formula:
Commodity Channel Index (CCI)