Monthly Archives: June 2011

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11:03 AM – A lot of people seem to doubt Apple heading into July. There is this popular idea that the stock is held back by the “weeklies” and that because of Steve Jobs’ health issues the stock is broken. You know, we’ve demonstrated that the first-half seasonality is generally pretty weak. It’s not uncommon for the stock to trade sideways to down in the first half of the year.

As we head into July however, there are going to be a lot of changes in sentiment. First off, Apple reports in just a few weeks. There is a lot of significance with this particular report. Bullish Cross is expecting Apple to report $6.62 in EPS on $26.6 billion in revenue — which is in line with a few other Apple journalists. This would bring Apple’s trailing twelve months of earnings (TTM-EPS) to $24.10 over the $20.99 it currently trades at.

That is a huge leap in the TTM. Now what this means is this. If we’re trading at $335 after July earnings, Apple won’t be trading at a 15.9 P/E. Instead, Apple’s P/E ratio will drop to 13.9. Eventually this will have a huge impact on the market. Fund managers are going to step in and buy at such a cheap valuation. If Apple trades at a 15.9 P/E ratio after earnings, that would put the stock at $383.19. That’s how dramatic of a jump we’re seeing in the TTM.

What’s even more interesting here is the fact that we’re going to see another similar jump in the TTM-EPS in October. We’re probably going to see a rise from $24.10 to $27 or higher. Probably higher. That is nearly 30% above our current levels. At a 15.9 P/E ratio, the stock would be trading at $429.30. At a 14 P/E ratio, the stock would trade at $378. So we would have to get a very depressed multiple to remain down here at these levels in the second half of the year.

11:29 AM — This chart of Apple is as bullish as it gets. Apple broke through its rising wedge and is now trading in a Bull-Flag. That’s as good a scenario that Apple bulls can ask for. The stock has very likely bottomed and any potential retest will be very weak. By the fall months, we’ll be seeing a major second half rally.

NOTE: This post only becomes public once the information is dated and well after the close of trading. To get live coverage and instant text notification of the SPY trade & Apple commentary, please subscribe to Bullish Cross.

9:00 AM — Apple is now testing it’s wedge support at $333.00. So far it doesn’t look so great but it’s not over yet.

10:55 AM — Apple has now formed three perfect push-ups and push-downs. Let’s see where this goes. Continue reading →

NOTE: This post only becomes public once the information is dated and well after the close of trading. To get live coverage and instant text notification of the SPY trade & Apple commentary, please subscribe to Bullish Cross.

9:38 AM — Apple is now clearly in breakout mode. As long as it remains above $333.50, the stock should be heading in the general direction of $352.00. This is a breakout of an inverted head & shoulders.

Continue reading →