Anatomy of an Ugrade, TA Style: Apple to 410 by Early March

Everybody knows when an influential analyst at a big name Wall Street shop upgrades a stock. So how come there is no hoopla when a Technical Analyst does the same? It’s time to change that, right here right now. Below is the daily chart for Apple, Ticker AAPL, that I have been using for the last 12 months.

You can see from this chart that I started putting out a forecast on AAPL in September 2010 and have been updating on a monthly basis. Allow me to walk you through the time line.

September 20, 2010: AAPL had been in a channel between 235 and 265- 270, with a quick move higher to 279 for a brief stay. On the break of the channel I put out the initial forecast of 313 by measuring the channel width and adding it to the break out level. Akin to a fundamental analyst (FA) saying a new product will change the profit picture.

October 12, 2010: As AAPL puled back in late September and then started higher in early October it became necessary to revise my price objective to 330, based on a symmetrical move from the late August low to the late September high of 50 points and adding that to the early October low. This may be akin to a FA realizing that iPads are selling better than expected and revising upward.

November 7, 2010: After hitting 310 in October and pulling back to 300 it started rising again. This gave a second measured move of 30 (from 280 to 310) and allowed for a confirmation of my 330 target, like a FA confirming guidance.

December 11, 2010: Off of the November pullback to 300 AAPL rose again to 320 before consolidating sideways. This allowed for a sharpened target of 340, similar to a tweak by a FA for improved margin guidance, perhaps.

January 10, 2011: Today I am raising my target to 410.  As AAPL rose through my 340 target, I step out one broader measure for the next target.  The move from Late August to mid November was 85 points and adding that to the 325 base from the current break out gives the new 410 target.  Further the symmetry of the move up to 330 would suggest this is achieved by mid March.

There you have it. I expect to see it on the news wire by the morning. I am also fully prepared to go on TV in my sweats and Ugg boots to defend it. I could toss in some Fibonacci lines and moving averages, or talk about the consolidation being a bull flag to try to confuse you and prove I am smarter than you, but often simple works just as well. So what does that fancy analyst on Wall Street have on me now?

Trade’m well

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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