Shares of Apple Inc (AAPL) are likely putting in a major top today. There is a topping tail forming on the daily chart, a clear bearish, top signal for stock chart traders and investors. Apple is up more than 100% from the lows of 2019. The last $20-$30 run in Apple is due to end of year window dressing. This is where fund managers add the best performers in the stock market to their portfolios, showing their clients they had the stock on the end of year statement. While shady, it is legal and happens every year end with the best performers.
This end of year run is also helped by investors being unwilling to sell Apple into year end because they do not want to pay the tax on the gain for 2019. This creates somewhat of a vacuum as minimal sellers and lots of buyers push the stock up exponentially. Please note that in the new year, Apple will see a major unwind of this move, likely retracing in 2020 to a Fibonacci retrace of near $240.00. Many fund managers are waiting until the beginning of January to sell Apple based on its massive P/E expansion with minimal to no growth. To put this into perspective, Apple traded for years at a P/E ratio of 12-14. It currently sits near a P/E of 25. At a valuation of near $1.4 Trillion Dollars, Apple has been moving higher simply on end of quarter/year window dressing and as sellers look to wait until the new year to avoid paying taxes this year on their big gains.
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