It seems all anyone can talk about on Wall Street is the price action in Apple, and whether the stock is starting to crack.
Apple hit an all-time high of $644 back on April 10th but since then the stock has done nothing but decline.
Is Apple starting to crack?
The Fast Money team has done some research and found 5 causes for concern:
1. Weaker Mac Sales
Late data suggests Apple could miss Street estimates for sales of its Mac computers in the just-ended fiscal Q2.
2. iPad Sales May Disappoint
Brian Blair of Wedge Partners warned that “iPad sales may not be as strong as the Street expects."
3. Profit Margins Peaking
BTIG’s Walter Piecyk told us on Fast Money that he doubts wireless carriers will keep offering giant iPhone subsidies. In turn, that should hurtprofit margins.
4. Over-owned
BGC analyst Colin Gillis thinks the stock is overowned. “Apple is the most widely owned stock among hedge funds – if sales results for iPhones and iPads start to disappoint you’re going to see hedge funds liquidate,” he says.
5. Chart Breakdown
Apple broke below 20-dma on Friday for first time since December 19, 2011.
Although the Fast Money traders concede that everything mentioned above presents headwinds, they do not think the stock is seriously challenged.
Tim Seymour agrees that the technical action isn't great but thinks the 50-day around $558 will hold. “That’s the level, where I’d buy,” he says.
Trader Guy Adami also thinks Apple is a buy.
“Yes, it broke though the 20-day – but that doesn't make it a broken stock yet. The stock action doesn’t indicate that,” he says. “Frankly, I think this is the opportunity every Apple bull has been waiting for."
Pete Najarian is also bullish and he put his money where his mouth is, today. “I pulled the trigger at $589,” he reveals. “Apple has paused before. It makes sense that there would be some kind of pause again.”
And in a live interview, Brian Marshall of ISI told us the pullback was purely mechanical and he also considered the pullback a buying opportunity.
