Avi Gulbert, an analyst, accents the challenging pattern that has since characterized Apple Inc. (NASDAQ:AAPL) since the fall in May, and offers his bearish outlook.
The general point of argument is the fact that unlike what many people believe, the slump was not a standard impulsive wave up, and as such demanded more caution. In fact, the disappointing earnings- which are deemed to be an outgrowth of the previously imagined standard impulsive wave up- further exclaim the need to tread with caution.
While this happened some time back, it is noted that Apple Inc. (NASDAQ:AAPL) grappled with the situation and finally made a break. After the leaden blow imposed by the earnings and the consequent dip in price, Apple Inc. (NASDAQ:AAPL) did rise up to the 587.71 mark and by doing so, snuffed out the growing bearish outlook. At the wake of it all, a target zone of 636-645 was placed. From that moment till now, Apple has risen strongly and its hopes of making an in on the 636-645 range are brimming.
With this in mind, the dynamics of the situation beg one big question. Why is there a bearish outlook despite the improved performance?
In a unique way of looking at things, Gulbert points out that the bullish stretch may have an imminent cliff ahead of it. He notes that while the stock would most likely set foot into the target region, subsequent trading would be submerged in uncertainty. His argument sets root in the idea that the current ending diagonal attained by Apple, could very well retrace to its once deplorable roots.
The conclusion, which hammers in the bearish outlook, suggests that Apple Inc. (NASDAQ:AAPL) could yet again dip to the mid 500 region.
I must admit that this foresight invites a lot of diverging opinions. On one end, it makes total sense and could very well be a close to accurate speculation of the unfolding drama. On the other hand however, there are some overlooked factors.
The iPhone 5 factor
The market is bubbling in wait for the iPhone 5. In addition to the fact the iPhone 5 is expected to have some notable features, you also have to bear in mind that the fanatic incline is swelling by the day. There is this share of the market that constantly grows by the day and always places Apple products second to none. Apple will definitely bank on the support of this section of customers.
In fact, the iPhone 5 is expected to sell at least 80 million units next year. It may be a huge game changer.
While Samsung poses by far the most formidable threat, the lopsided court battle could salvage the situation. Nonetheless, with the piles of papers presented as evidence, the litigation process could stall for some time. I therefore believe that the case will have its effects in the long haul.
I believe that Avi’s outlook bears some shred of truth. Notwithstanding, the long haul avails a lot of opportunity for Apple Inc. (NASDAQ:AAPL) and the foreseen slump may pass by as slight bump.