Apple drops under $600; is the moon ride over for investors?
RCA caught the attention of investors before crashing in 1929 with all other shares. In the 1960's, color television was the buzz word along with automatic bowling pin-resetters. Companies like Sylvania and Brunswick soared and plunged. In the 1980's, Home Shopping Network made millionaires out of some investors, but subsequently ruined others. And who could forget the internet boom in the 1990's when so many stocks ran up sharply, only to drop just as fast when the bubble burst.
Of course, Apple has been making money and lots of it. But investors want to see growth expanding, not contracting. And since Wall Street is said to look ahead 6-9 months, Apple's shares could be warning us that times won't be so good for the company by next spring. Or, it could merely be some profit taking. With a stock that runs on momentum like Apple, all it takes is one person deciding to cash in to buy an Apple iPhone 5 to set off a chain reaction of sellers.
For what it's worth, back in April we told you how one analyst who uses the complicated Elliott Wave form of technical analysis was calling for the shares to drop to $510. If this does happen, we would call it the broken clock form of analysis because the stock soared over $100 points higher first. Remember, even a broken clock is right twice a day. For those bullish on the stock, the good news is that the shares have hit the 200 day moving average which often presents a short-term bottom and a buying opportunity for Wall Street players. The last time the 200 day line was touched was last December with the stock trading around $360.