Apple is Toast

posted in: AAPL, S&P 500 | 0

AAPL has spent most of 2015 forming a mature topping pattern:


AAPL (Weekly)


 An end of year rally back up to the $112-$115 area would be par for the course before a much larger decline takes place early next year.

Meanwhile, sell-side analysts couldn’t be more bullish on AAPL’s prospects:


This is a toxic recipe; rapidly deteriorating technicals with virtually unanimous bullish sell-side sentiment. In addition, AAPL’s ‘fundamentals’ (~2% dividend, forward P/E of 10) seem to indicate that AAPL shares are cheap. So all of this begs the question of who’s been selling AAPL for the last 6 months?

The chart indicates that there has been an extensive institutional liquidation taking place during the 2nd half of 2015 which means that AAPL shares continue to be transferred from institutional investors to retail investors. This is a bearish phenomenon and it does not bode well for the broader equity market in 2016.