It’s
not my normal practice to comment on the action of individual stocks in this
section of the report, but I found it interesting that billionaire investor
Carl Icahn told CNBC today that he purchased “quite a bit” of Apple (AAPL)
shares after the stock’s heavy sell-off.
Shares of the tech giant fell over 5% after Wall Street was disappointed
with the company’s pricing of its latest iPhone. Icahn said that loading up on Apple shares
was a “no brainer” because they’re “extremely cheap” and are one of the “best
brands.”
What’s
significant about AAPL is that Icahn’s high-profile bullish comment occurred
just as the stock tested the widely watched 50-day moving average (see chart
below). While the 50-day MA doesn’t
figure as prominently in my moving average methodology as does the 60-day MA,
it’s nonetheless a significant trend line by virtue of its being widely used
among hedge fund managers.
The 50-day MA is also heavily incorporated into the computer algorithms of high frequent trading operations. It would not surprise then to see Icahn’s bullish near-term forecast on APPL prove to be self-fulfilling. [Excerpted from the Sept. 11 issue of Momentum Strategies Report]
The 50-day MA is also heavily incorporated into the computer algorithms of high frequent trading operations. It would not surprise then to see Icahn’s bullish near-term forecast on APPL prove to be self-fulfilling. [Excerpted from the Sept. 11 issue of Momentum Strategies Report]
