A Wall Street analyst’s downgrade of megacap tech leader Apple (AAPL) didn’t ruffle the feathers of institutional investors, even as major stock indexes cooled mildly Tuesday. Apple, down 0.9% to 174.79, still hovered only 1% below its newest buy point, 176.34 in a flat base.
X Apple is also still extended from a prior buy point at 160.97, stemming from an eight-week cup with handle.
Apple is also up more than 47% since it broke out of a first-stage cup with handle at 118.12 in early January. That cup with handle was part of a long bottoming base pattern.
Nomura Instinet cut its rating on Apple to neutral on concerns that iPhone X sales are already incorporated into the stock’s price. Jeffrey Kvall also noted a “historically full multiple.”
Meanwhile, Bitcoin Investment Trust (GBTC) took a well needed break, showing wild action as the Bitcoin-tracking exchange traded fund careened from a new all-time high of 3,523 to an intraday low of 2,630.
With an intraday range of 33.9%, Bitcoin Investment is definitely not for the faint of heart. Yet for those who embrace time-proven chart patterns that have shown up in the greatest stock market winners going back to the late 19th century, Bitcoin Investment is acting just as one would expect after it bolted out of a deep yet well-formed cup with handle at 985.10.
The gain from that Nov. 22 breakout has now exceeded 257%.
At 3 p.m. ET, the Nasdaq composite sank 0.6%, but is still up for the week following Monday’s 0.8% boost. Investors are showing unwillingness to dump stocks as the House of Representatives passed a major tax reform package on Tuesday. The Senate is expected to do the same as early as Tuesday evening and send it to the White House for President Trump’s signature before Christmas.
The S&P 500 eased almost 0.3%. Finance, REIT, utility, solar and automaker stocks led the downside. The Dow Jones industrial average was off nearly 0.2%, with just two more components in addition to Apple down 1 point or more.
Volume is running lower vs. the same time Monday on both main exchanges.
Microsoft (MSFT), one of the tech components within the Dow 30, dropped 1% to 85.53 in light trade and is mildly below an 86.30 buy point in a new flat base. The cloud computing, business software and Xbox giant initiated its slow yet steady advance with a late-July 2016 breakout past a 56.87 buy point in a three-month flat base that’s part of a longer saucer pattern.
As noted in this Investor’s Corner column, the saucer pattern requires patience on the part of the investor before a proper new buy point finally emerges.
Microsoft holds a solid 91 Composite Rating from IBD Stock Checkup.
Back to Bitcoin Investment Trust, while the ETF has simply skyrocketed amid a surge in interest in the alternative currency, one reason why Bitcoin perhaps has not yet reached bubble conditions is the fact that both the Cboe and CME Group have only recently begun trading futures on their respective exchanges.
Two, the total value of Bitcoin being traded globally is said to be only a fraction of the total value of trading in bonds, stocks, commodities and forex.
A third reason why Bitcoin could see future growth is that professional money managers are showing an increasing appetite. The Bitcoin.com news website reported that hedge fund manager Bill Miller, a former star of the Legg Mason Value Trust mutual fund, currently has half of its assets in Bitcoin.
While biotech shares have not have a merry fourth quarter, Biogen (BIIB) stands out as one large-cap firm that could potentially break out.
The stock got hammered after so-so Q3 results (earnings up 22% to $ 6.31 a share, revenue up just 4% to $ 3.08 billion), but the sell-off was limited to 13% after Biogen notched a 52-week peak of 348.48. Since then, the stock has been forming a flat base that could also stretch into a saucerlike pattern.
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