Image by Getty Images via @daylife
How long ago was it that the investing world was bemoaning the post-Steve Jobs' Apple, crying about the release of the iPhone 4S (instead of the much-anticipated iPhone 5), and turning up their nose at new CEO, Tim Cook?
Now, with rumors that Apple products could start appearing in Target (NYSE: TGT) stores as part of a new roll-out of Apple Stores, the market for Apple shares couldn't be more bullish - and overbought.
Shares of Apple have closed higher for four days in a row, finishing in extremely overbought territory for each of those four sessions. Closing at $422.40 on Friday, APPL is just $4 shy of a new 52-week high. Shares are up more than 11% since their last finish in oversold territory in mid-December.
Temptation to pile into Apple may be strong, but with the stock so overbought and trading at significant highs, traders and active investors are almost certain to be able to pick up shares of Apple at lower levels, potentially very much lower levels, over the next few days. The stock has earned "consider avoiding" ratings of 3 out of 10, and a short-term, negative edge of just under half a percent.
The last time Apple traded to similarly lofty levels in mid-October, the stock reversed to close lower for four out of the next five trading days, losing more than almost 7%.
Having mentioned Target at the beginning, let's take just a minute to assess how this stock has been trading in recent days. After plunging lower in Thursday's trading, finishing both oversold and below its 200-day moving average, shares of TGT bounced by nearly 1% in Friday's session.
Should traders jump on board the moving train in Target? The stock has neutral ratings of 5 out of 10 ahead of Monday's open, but a short-term, positive edge of more than half a percent. Again, the fact that TGT is trading below its 200-day moving average may be a disqualifying factor for many traders who only buy stocks trading in bull market territory.
David Penn is Editor in Chief of TradingMarkets.com. If you like stocks, then you'll love 7 Stocks
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