Having fallen 35% in 4 months and shed over $200 billion in market value, there is little doubt that shares of Apple (AAPL) are currently oversold. Not only is the stock trading meaningfully below its long-term 200-day moving average for the first time in four years, it also has more sell and hold ratings from analysts than it has since the trough in 2009.
It has fallen a long way in a little time and its impenetrable luster has lost some of its shine. It's also why Tom Kee, president & CEO of Stock Traders Daily, is starting to get interested in a stock he says he's hated forever.
"It's very, very close to being a buy," Kee says in the attached video. Although the former Morgan Stanley broker turned online trader says changing market technicals won't allow him to be more specific, he does says that "if it goes up a little more, it's going to trigger a buy.''
More specifically, Kee says he sees downside risk around $420 a share, but feels once the stock resumes its uptrend channel it should rebound "to $570 or so, maybe even higher."
At the same time, investors should know that Kee characterizes himself as a ''trader by heart, not buy and hold," which means his ideas can and do change. Also, on a macro level, Kee is very bearish right now and sees the Dow Jones Industrials dropping 50-60% after setting a new high.
"I do not like the markets and think they are reaching a top," he says, "but I do like Apple."
As a result, Kee recommends hedging Apple and shorting the Nasdaq 100 (QQQ) as a pair trade for the next few months.
- Investment & Company Information