Grow An Apple With Steve Jobs?

01/23/07 08:09:22 AM

by Koos van der Merwe

Back when I first wrote about Steve Jobs and Apple on October 28, 2004, I said, "Accumulate." Have I changed my mind?

Security: AAPL
Position: Accumulate

The article I wrote in October 2004 was about Steve Jobs as the chief executive officer of Pixar, the animation studio that created Toy Story, A Bug's Life, Toy Story 2, and Finding Nemo. I wrote that his business life was success incarnate, that he was a Midas with the golden touch. Since then he has introduced the world to the iPod and now he is introducing the world to iPhone, and more successful movies. What next is on his drawing board?

FIGURE 1: APPLE. And the Apple tree grows and grows.

Graphic provided by: AdvancedGET.

Figure 1 is a weekly chart of Apple and shows how the price has moved from a low of $6.98 in December 2000 to the present high of $98.54, and remarkably, none of it because of computers, probably one of the reasons for the proposed name change from Apple Computers to simply Apple.

FIGURE 2: APPLE. And the apples are beautiful and good to eat.

Graphic provided by: AdvancedGET.

Is the stock worth buying at the moment? Well, the daily chart does suggest that Steve Jobs has only just started (Figure 2). The chart suggests the start of a new impulse wave and who knows where wave V will be. If Elliott theory is to be believed, then the top of the new impulse wave, wave V, would be an incredible $155.10. How would we reach this target? Simple.

Wave I is $48.07 ( $98.54 - $50.47 = $48.07).
Wave II is $21.13 ($98.54 - $77.41 = $21.13).
Wave III could be wave I * 1.6198 = $77.78.
Wave IV could be equal to wave II m= $21.13 and
Wave V could be equal to wave I = $48.07.

So $50.47 + $48.07 - $21.13 + 77.78 - $21.13 + $48.07 = $182.13

Of course, there are other ways of targeting, most a great deal more conservative, but with Steve Jobs and his ingenuous mind, going for the exaggeration may be conservative.

The stochastic oscillator is suggesting a correction in a wave ii of wave III, which should be used as an opportunity to buy.

Once again I say, "Go for Steve Jobs. Go for Apple."

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.