Tech Musings - Review

Apple has corrected almost 23% from its peak. I have given a sell call on Apple. In my post on 21^st October 2012, I wrote, “Apple which has 15% weight in Nasdaq 100 and almost 4.5% in S&P500 has turned significantly bearish. It seems that Apple may correct up to 450 – 500 levels dragging index with it.” Since then Apple has corrected almost 100 USD and made a low of 534 USD on Thursday. 

Apple Daily chart

In the second chart we can see that Apple took support at the support line and has bounced back from there. Since the correction in price was rapid I am expecting a pull back from here which may take the stock to 580 -600 levels. Only if apple sustains above 600 levels a new uptrend will start. 

Apple daily chart

If we look at monthly chart of Apple we can see that Apple has been moving up in a rising wedge. The support for Apple is around 425 - 4 50 USD. My base case is that Apple will continue to correct for few more months after the pull back and we will see these levels on chart. 

Apple Monthly Chart

In the same post I have also mentioned about Amazon. Since then Amazon has modestly corrected from 240 to 216 levels. Overall trend in Amazon remains bearish.

Amazon

If we look at monthly chart of Amazon we can see that long term support for Amazon is at around 140 -160 levels. Amazon is trading at a forward P/E of 110X and there is a lot of scope for price correction.  Two heavy weights of Nasdaq are looking weak, this imples that markets have not bottomed out after the recent fall. My own intuition is that we will see a sharp pull back in markets and the fall should resume.   

Amazon Monthly chart

On my post on 29^th September I was expecting crude to correct sharply from 90 USD to 70 USD. Since then although crude has been weak but the fall has been slower than expected. If you see the given chart of crude you can see that crude has broken the head and shoulder formation and is sliding in a downward channel. Any Short trade on crude should keep 95 as a stop loss on weekly closing basis.

NYMEX Crude

Summary:-

1.       Expect apple to resume  fall after a sharp pull back

2.       Expect Amazon to slide to 160 levels

3.       Crude remains bearish, sellers can keep 95 as stop loss on weekly closing basis.