Warren Buffett Bought About $1 Billion Of Apple Stock. Should You Invest In Apple Now?
Sometime ago, there was a news report about Warren Buffett investing about $1 billion into Apple stock. This is quite surprising since Buffett is known not to touch tech stocks. You can read about it in an article on CNN Money. If the greatest investor on earth is purchasing Apple, should you also follow in his footsteps and buy Apple now? Let's take a look at what the charts are telling us.
When you look at the daily chart above, AAPL looks like it is meandering around 90-100. Stock is below the 200 MA which shows us that this is not a very healthy stock to own.
When we look at a longer time frame, the weekly chart of AAPL, things look a bit clearer. The stock is finding support around the 90 area and finding support at the weekly 200 MA. It looks to me it is setting up for a change in trend. I deem it bullish when it trades above its weekly downtrendline and trade above the weekly 20 and 50 MA.
It is when we learn to see thing from a long term perspective like Warren Buffett, we begin to understand a bit how great investors think. The above monthly chart of Apple perhaps reveal to us the probably reason why Buffett is investing in this stock. It is in a healthy monthly uptrend and is at a monthly support. It is resting on the monthly 50 MA and looks like it is breaking a downtrendline. Hopefully the breaking of the downtrendline will propel the stock higher in the long (very long) term.
What To Do
The question to ask yourself now is, do I want to invest in Apple?
Well, if you are able to hold onto the stock for a year, two or more just like Warren Buffett, then I think that this is a good time to start accumulating some Apple shares. Buy some now, buy some next week or next month. Taking a long term perspective, when you buy does not matter.
From the charts, we can learn a thing or two.
Perhaps buy some now, buy some when stock breaks above weekly 20 Ma, buy some when it trades above weekly 50 MA and buy some when it trades above the weekly downtrendline. Then sit and wait like Buffett. If it drops more, buy some on the way down as long as the monthly charts are still healthy.
But don't put all your money into Apple. Be wise, perhaps a max 10% allocation of your stock portfolio will do. There are many great investing opportunities out there.
Well, if you are able to hold onto the stock for a year, two or more just like Warren Buffett, then I think that this is a good time to start accumulating some Apple shares. Buy some now, buy some next week or next month. Taking a long term perspective, when you buy does not matter.
From the charts, we can learn a thing or two.
- The stock is in a long term monthly support
- As long as Apple is above $75 or $80, the stock is still very healthy from a long term perspective
Perhaps buy some now, buy some when stock breaks above weekly 20 Ma, buy some when it trades above weekly 50 MA and buy some when it trades above the weekly downtrendline. Then sit and wait like Buffett. If it drops more, buy some on the way down as long as the monthly charts are still healthy.
But don't put all your money into Apple. Be wise, perhaps a max 10% allocation of your stock portfolio will do. There are many great investing opportunities out there.