should you buy aapl

Should you buy AAPL now? [12-29-22]

Is now the time to buy Apple?

Let’s look at a weekly chart going back three years with a Fibonacci retracement study. You can see that the 50% retracement level is $118. Today, December 29th, the stock is trading at $126, so you’ve got 8 points down from here. Then you’ve got the 200 day moving average at around the same area or a bit lower — around $115. Below that you’ve got a large area of long-term support at 103 – 104.

So is now the time to buy Apple?

It was trading at $182 a year ago and the fundamentals of the company are strong. It’s got tens of billions in cash and it’s clearly not going out of business. So if you are a long term investor holding for many years, this might be a fine place to buy. But even if you are a long-term investor, you still want to pick a strategic point of entry into the stock. You wouldn’t want to be the guy buying at 180 a year ago, because now you would be almost 60 points down. And even if you are holding for the longer term, a 60 point drop is not going to make you feel too happy. It might even make you sell the stock, which I don’t think you should do at this point.

So even if you are a long-term investor you probably should wait until it hits the 118 to 115 level to start buying. If you want to be a bit safer, you’ll wait until it gets closer to 105.

Of course, there’s always the risk that AAPL might not go lower and you miss a massive rally. However, in this environment of rising rates and growing recession risk, I doubt that you’ll miss the boat if you don’t buy right away. And even if you miss the first 5 or 10 points, you’ll still have plenty of room to ride AAPL higher.

If you want to buy right now, then you can buy a portion of what you would normally buy. For example, if you want to buy 100 shares, buy 25 shares here and then buy more if the stock comes down, until you’ve bought your entire position.

Remember, there’s no law requiring an ordinary investor to be fully invested in the market. If you don’t like the current market environment and think that you will have a better opportunity to buy stocks at cheaper prices, then you can keep your cash in an interest bearing instrument and make a safe 4% or higher return. Considering that the S&P was down 19% in 2022, getting a safe return is not such a terrible idea.

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