Apple 2.0

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Trading AAPL: A double dose of technical analysis

June 3, 2009: 7:28 AM ET

Cramer AAPL openerA pair of videos appeared on the Web Tuesday that offer a two-part primer on how to trade Apple (AAPL) shares based on technical analysis -- the science (or pseudoscience) of predicting what a stock is about to do based on what it did in the past.

If you're not familiar with such concepts as support, resistance, breakouts and Fibonacci retracements, you can learn a lot from each of them.

Unfortunately, the two videos offer conflicting advice. One says to sell Apple. The other shouts buy! buy! buy!

The more enlightening comes from The Market Club and is basically a promotional video for the company's trading tools. But in four minutes it swiftly demonstrates how to apply Elliot wave analysis and the Williams percent range to Apple's recent stock movements and suggests that the stock -- which has enjoyed a 61 point (78%) run-up since Jan. 20 -- may be ready for a pullback.

The more entertaining (or irritating, depending on your sensibilities) is tape of Tuesday's episode of Jim Cramer's Mad Money. Quoting extensively from his favorite technical analyst, Cramer argues that tech stocks in general are about to break out and recommends, in particular, buying Apple.

Cramer also offers several predictions about what Apple is going to do at the World Wide Developers Conference next week, some of which strike us as dubious. But advice from Jim Cramer, who famously described on tape to how he could manipulate the market for Apple when he ran a hedge fund, is always best taken with a grain of salt.

See the videos below the fold.

See also:

Cramer: Bullish on Apple

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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