Time to Get Long AAPL for an Earnings Run?

• Posted by Robert Sinn
• on July 2nd, 2012

$AAPL broke out above resistance at $590 on heavy volume this morning:

 

While I don’t recommend chasing the stock after a 5% move in just two trading sessions, AAPL still offers an attractive valuation combined with a compelling growth story. While developed markets are arguably near full saturation with AAPL products, tremendous opportunity still exits in emerging markets. Credit Suisse estimates that the emerging market middle class could drive an incremental $89 billion in sales and $21 of earnings per share for AAPL by 2015.

While I have generally been an AAPL skeptic since the chart began turning parabolic in February, the bullish case for AAPL longer term remains compelling and the history of pre-earnings ramp-ups offers a good reason to be bullish short term – just remember that once the party bus is already full when earnings are announced the stock has a very strong tendency to sell the news regardless of how good it may be.

 

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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