The logo for Apple Computer, now Apple Inc.. The design of the logo started in 1977 designed by Rob... [+]
Everyone looking at analysts’ recommendations to get a clue about the direction of Apple’s stock cannot help but get confused. When the stock was heading towards the $700 mark, a chorus of analysts were calling for the stock to reach $800, $1000, even $1500. Now the stock is heading towards $550, another chorus of analysts is calling for the stock heading for $470, $450, and so on.
As we did write in a previous piece, such predictions hype investor expectations feeding into a speculative frenzy whereby fear replaces greed, causing wild fluctuations in the price of the stock. Those who have been around Wall Street long enough may have vivid memories of similar predictions for Cisco Systems (NASDAQ:CSCO),EMC Corporation (NYSE:EMC), and Hewlett-Packard (NYSE:HPQ) back in the late 2000. We all know how that frenzy ended. What should traders and investors do?
Traders may want to take advantage of the increasing volatility of the stock with option strategies. Investors may want to set emotion aside, and stick with the company fundamentals, its PE, its earnings and revenue growth, the success of new iPhone and iPad releases, and its product pipeline. Above all, Apple’s commitment to its innovative trait—something the company’s CEO Tim Cook has repeatedly re-affirmed.
Long on AAPL
Also read Apple’s Stock in the News: The Message and the Noise
