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Would You Buy Apple Today?

01/29/13 08:16:25 AM
by Koos van der Merwe

Steve Jobs is no longer around. Tim Cook is trying his best to emulate him, but is he doing the job?

Security:   AAPL
Position:   Accumulate

Apple (AAPL) is a company that changed the world of computers, with its iPod, giving music cheaply to all; iPhone, shaking the cell phone market; iPad, bursting through the computer market, with Macintoshes adding the finishing touch.

Rumors of a TV abound, and the world is expecting something wonderful, but... that is the problem, "but." Can Apple CEO Tim Cook achieve it, or is it going to be another iPhone Maps, a challenge to Google maps that failed miserably. Steve Jobs would never have allowed Maps to be on the iPhone until it was better than Google maps. So will Tim Cook succeed in being another Steve Jobs? The market does not seem to think so, but is the market correct?

FIGURE 1: AAPL, MONTHLY. Here's an Elliott wave count.
Graphic provided by: AdvancedGET.
Figure 1 is a monthly Elliott wave chart of Apple (AAPL). It shows my preferred Elliott wave count, suggesting that the share price should soon start moving up in a wave B, once the relative strength index (RSI) gives a buy signal. What has led me to this count in preference to the wave count of the monthly chart in Figure 2 is that wave 1 was a complicated wave. This means that wave IV must be a simple wave, which in Figure 1 it is.

FIGURE 2: AAPL, MONTHLY. Here's an alternate Elliott wave count.
Graphic provided by: AdvancedGET.
Figure 2 has an Elliott wave count that also shows that wave IV could be a simple count, but only if the share price starts rising into wave V with no complications. With the bears in the market looking poorly on Apple as shown by its drop over the past few days, this does not look possible; nevertheless, there are many out there who love Apple and its products, and should they surprise the world with a surprising product, then this wave count could indeed take precedence.

Both counts show that the share price is getting ready for a correction upward. Figure 1 is suggesting a B-wave correction, which should not go higher than the high of wave V ($710.03). Figure 2 is suggesting that the share price could indeed go higher than wave III ($710.03), suggesting a target in the region of $800. All this depends on what Tim Cook has up his sleeve.

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.

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