Apple's Upside Won't Last Forever

Today, January 13, 2005, Apple Computer (AAPL) announced blow-out sales and earnings. Consumers are scooping up iPods as fast as Apple can make them. Many Wall Street firms have recently upgraded the stock and some have raised their price targets to the mid $80 range.

There is no question that AAPL has had a spectacular upside rising from $13 to over $70 since April 2003. But how much more time does this stock have on the upside? The weekly price chart shows a possible double top, which is an indication that the upside is limited. Also the steep rate of the price ascent is unsustainable. The current upside looks much like the prolonged upside that ended in 2000 as that price bubble burst.

Beware of this stock. The current price in the mid $70 has lots of good news already in it. It could go higher but when investors sense that sales are slowing, the stock will crack and its price will decline very rapidly.