HerbVic and all,
I am a little concerned about Apple right now. The stock action does well when the market goes up, but quickly falls off when the market goes down. The stocks relative strength seems average to below average. Today for example, the stock was very thinly traded, and the MM's allowed it to find its own level. Frequently, the bid/ask spread was 1/4 point, the largest I have seen in a long time. Moreover, the MM's would post a bid or ask price showing 10 lots available, then move the price up or down a tick when only 100 or 200 shares traded. While there was some large blocks, they mostly seemed to be from individual investors because the MM's did not seem to be taking positions.
What worries me is that Apple may be in an intermediate correction at the present time that could take it below 25 if the market tanks again (which is a very likely scenario).
In trying to figure out why this may be happening, it occurred to me that sales may not be as good as we expect in Q3. While I still anticipate beating the published earnings projections, the 'whisper figure' may not be achieved.
The reason for suggesting a possible sales decline is based on several factors. First, some have posted they believe Apple stopped producing its older models weeks ago, which means the company may not have as many computers in the pipeline as needed to meet demand. Second, if the Powerbook with the 14" screen has been delayed because of the resistor problem, this could delay recognition of earnings into Q4 because of production slowdowns and the attendant lack of inventory for sales. Finally, I expect that at least some potential Mac buyers are waiting for the iMac to come out, which will only affect Q4 results. Moreover, some may hold out until next year waiting for MacOS X to be released.
I don't know how realistic these thoughts are, but if there is a slowdown, it could have a devastating impact on the share price, at least in the short to mid-term.
I would appreciate some feedback on this from anyone to let me know if I am full of it or what. TIA
Sam |
