Apple is down 5 days, and there is talk about collapse. We have the same situation taking place between other tech stocks as well.
There is an interesting set up taking place:
1. Google, at 609, is currently trading with a trailing multiple of 18.4. That is a low-end of its potential trading range. (Historically it has seen a trailing multiple of 16 during times of financial systemic collapse.)
2. If factoring relatively decent earnings for AAPL, assuming a traditional 24% earnings beat, AAPL will be trading with a trailing multiple of 15 at current levels (price of 586).
So will these stock, who many like to wrongly categorize as "high-flyers" collapse?
If there is no systemic issue that materializes, then they will not collapse, and right now is a buying opportunity.
The above names, along with others with similar growth characteristics, usually lead the market down and up. They will see a bottoming before the SP500 does, and continue their march upward before the market does.
With that said, there is concern that the market will breach its current level of support.
I effectively added to my Google position, and maintaining a small Apple position I took on the other day. I also took on market protection.
Apple is a bit trickier because they will report next week. If the bloggers (or independent analysts) are right, Apple numbers are going to blow passed expectations. (Then today is a good buying opportunity.) But if the street decides to focus of 1 or 2 data points (like they did with Google), they will follow market sentiment. (More on Apple in a separate, more detailed, post.)
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