Market Insider: Apple Shows Resilience Short Term
By: Uncertainties about Apple CEO Steve Jobs' health will likely continue to bite into Apple's stock price, but its behavior Tuesday shows that it may be more resilient than some think.
Apple hit a low of $326 early this morning and was heading for $340 at midday.
"The breakout on January 3 above $326 was a big level of support that held in the first 10 minutes of trading. Pre-market it was trading $330/331. $332 to $333 was the 20-day moving average. That was the first level of support it sliced through in the first couple of minutes of trading," said Scott Redler of T3live.com.
"We'll need to revisit it around $345," said Redler, who follows short term technical moves and is a known bull on Apple stock. He sold the stock last week in the $340s, but he bought it back today at both $326.50 and $337.
Wall Street analysts todaywere encouraging investors to buy on the weakness. Oppenheimer told clients the pressure on the stock was temporary, and Bernstein said investors should buy.
The next test for Apple is its earnings report after the closing bell today, but longer term, the pressure is on for the company to reveal more information about Jobs' health and the duration of his leave.
"I think there's a lot of question marks that hang over the stock right now. My sense of it is that earnings are going to be good or they would have announced it after the earnings. If the quarter was a miss, I think they would have announced it after," said Wedbush Securities managing director Steve Massocca.
Massocca said the problem for the stock is that there are too many unanswered questions about Jobs. "There's a lot of questions about how important he is in terms of product development," he said.
Apple is not just a tech darling. It is a proxy for the Nasdaq and technology in general.
Massocca said Apple is about 7.4 percent of the broad-based Nasdaq composite, and it is about 20 percent of the Nasdaq 100. The Nasdaq 100 is the index represented by the PowerShares QQQ ETF.
"It is just about equal in the Nasdaq composite to Google and Oracle combined," Massocca said.
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