AAPL – Apple Computer (Last:127.88)

The stock has taken a Whoopee Cushion bounce following an upbeat earnings announcement after the close ($3.06 per share, versus $2.59). We’ve been using 129.20 as an intermediate-term rally target, but the apex of this evening’s hysteria has achieved only 116.46 thus far.  No doubt, the short squeeze would have gotten closer to the target if buyers were not bucking a bearish tide that saw the Dow Industrials down almost 400 points earlier in the day. Because Apple is the most valuable company in the world, we’ll alway want to pay close attention to its ups and downs.  My hunch is that the entirely normal-looking correction of the last two months is over and that today’s surge will lift the stock from consolidation mode toward 129.20. If that is in fact about to occur, it bodes well for the stock market as a whole. _______ UPDATE (February 17, 7:10 p.m.): An ex-dividend adjustment yesterday and a bad print at 129.45 may have compromised my strategy, which was based on a top precisely at 129.20. For now, and assuming subscribers did nothing, repair to the sidelines. If you bought puts anyway, they should be slightly profitable, since the stock finished toward the low end of its range. In that case, set a stop-loss that would pop you out of the trade for just a small loss. _______ UPDATE (February 18, 10:36 a.m.): The pattern that projected to 129.20, as I emphasized repeatedly, could not but produce a tradable top at that price. And so it has. I’ll be interested to see how long it endures, however, and how deep the pullback is. If the stock soon comes roaring back, it will be going to 144.56, a target that I first broached in August. Were that to happen, the entire stock market will get dragged higher by AAPL. In the meantime, anyone who is short AAPL off my target should let me know — in explicit detail — so that I can establish tracking guidance.