Apple 2.0

Covering the business that Steve Jobs built

A classic Apple slingshot

December 6, 2012: 11:27 AM ET

It suffered its biggest one-day loss in four years Wednesday. On Thursday it sprang back

Screen Shot 2012-12-06 at 5.09.37 PMFORTUNE -- Time to revisit, once again, our favorite Jason Schwarz's quote:

"If you can keep a good stock down then you are able to load up for the ride back up. It's like a slingshot -- the harder you pull, the more propulsion you generate."  -- Apple: Seven reasons shorts love it

It's still early, but the action in Apple (AAPL) Thursday morning following Wednesday's $37.06 (6.4%) drop -- its worst in four years -- has all the earmarks of a slingshot sprung.

There was no shortage of explanations for Wednesday's shellacking -- including the self-fullfilling prophesy of margin calls -- but the agitprop of Apple bears didn't help. Creative Global Investments' Carlo Besenius piled on Wednesday with a particularly poisonous "sell" recommendation that included what may be the definitive litany of negative bullet points:

 Bad technicals; bear market status now for 2012
 Death Cross formation
• Long Term Head & shoulder pattern in formation
• MACD indicates a Bearish Trend
• Chart pattern indicates a Strong Downward Trend
• Relative Strength is Bearish
• Up/Down volume pattern indicates that the stock is under Distribution
• The 50-day Moving Average is falling which is Bearish
• The 200-day Moving Average is rising, but slowing, still Bullish
• Watch for resistance at 589.25
• Margin requirements hitting stock
• Tax Selling due to huge gains
• APPL has not announced a 2012 special dividend
• Fundamentals slowing
• New product cycle & pipeline slowing
• Buyers psychology changing
• Pricing Pressure due to too many competitors with lower priced products
• Margin Pressures showing
• Nokia deal with China Mobile having an impact
• Samsung outselling I-Phone, and accelerating
• Too many commentators having opinions, and no facts

I'm particularly fond of that last one.

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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

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