This recent move up from Apple (AAPL) has been stellar. No two ways about it, the strong price action following their recent developers conference has been on very heavy turnover. What is most interesting here is the opportunity seen by short sellers, preaching the 'stock has to go down because it is at all-time highs'. We hear that a lot these days, but if you look around at other stocks making new highs, you would realize it is simply the worst spot to short a stock.
Momentum in names like Apple and NVIDIA (NVDA) is very strong and can carry a stock much further than anyone expects. So it pays off to ride the trend and not fight it. Eventually, it will end, but hopefully, you have caught much of a big move before it is over.
There is no question Apple is overbought. The candles are blue and have been for better than a month, which says strong buy on the GoNoGo system of composite indicators. MACD is overbought but still on a sell signal. Stochastics (pane 4) are on a buy signal and embedded, which means pullbacks/dips will be bought.
So, what's wrong with Apple? Not a thing, but a pullback towards $204-207 should not come at a surprise to anyone, in fact it might be the dip to be bought, one of many over the years.
We rate Apple a two in TheStreet Pro portfolio, or "stockpile on pullbacks."
At the time of publication, TheStreet Pro Portfolio was long AAPL.