AAPL
AAPL sold to 419 this morning and is now bouncing hard (currently 437). If you bought at my suggested 420, I think a reasonable plan is to take half in the 440s and half in the 490s, with a stop now under 420, maybe 414.
AAPL update
I’m buying a 2/3rds position in AAPL here at 405 for an intermediate-term buy and hold.
The positives: Lots of technical support in the 390-400 area. Valuation extremely attractive. Possible high volume flush-out day. Earnings report in a couple weeks.
The negatives: Peak earnings last year? Just broke a support level at 420. All the support at 400 is super obvious. Moving lower on high volume. Overall market might be in a correction phase. Earnings report in a couple weeks.
AAPL
AAPL isn’t showing any bottoming pattern yet, but longer term I think the chart looks good for a big bottom anywhere in the 390-424 range. (424 right now)
Some Large Cap Stocks
My assumption is that wave 4 is now over and we have started wave 5 with targets at new highs, followed by an extended major pullback into the second half of the year. I will not be chasing longs here, though. If we get a nice push in the next month, I will be looking to hedge or sell long positions and possibly short the indexes. Once earnings season is over in a few weeks, I don’t know what the catalysts for a move higher might be, while European problems and the “sell in May” phenomenon are obvious catalysts for downside.
Last month I gave a few speculative stocks that should move quite a bit higher if they can hit next year’s earnings estimates. I looked at some big safe stocks today; here are a handful I like, along with reasonable targets going into next year:
INTC (27.99) target 32 with 3% div yield
AAPL (607) target 700 with 1.73% yield
CAT (103.25) target 120 with 1.76% yield
JPM (43.72) target 50 with 2.74% yield
GE (19.45) target 21 with 3.5% yield
Note that there are also quite a few more speculative high yielders paying dividends of 8-10%. Without doing much research, I bought this basket on Tuesday: MPW (8.87), BKCC (9.36), NCT (6.86), and HTGC (11.12). I will look to buy BBEP on weakness, although I already missed the nice dip.
Also note that, of the four speculative stocks I said I liked last month, only STX has support from strong earnings right now. The appreciation of the others is mostly dependent on what will happen next year. That means they could easily suffer if the overall market is weak into the second half of this year. I expect to just hold VELT (even though its next two quarters are expected to be only breakeven and the stock could be weak), but wait on FSII and SCLN.
Some Value+Momentum Stocks I Like
These strike me as good value based on their analyst estimates:
VELT at 12.49 — Hoping for $20-25 in the next year
STX at 27.93 — Hoping for $35-40 within 6 months
FSII at 4.98 — Hoping for $6-8 within 6 months
SCLN at 6.21 — Hoping for $7-10 within 6 months — a little higher risk on this one
Loroz Trading 