Apple: Price Stall Is Foundation Building, Not Topping Out

Thursday, May 26, 2011

I recently read a cautionary article about Apple (AAPL). The gist was that Apple is a good growth company, but the stock hasn’t gone anywhere this year. Therefore, something must be wrong and investors should be cautious.

The problem with that logic is that it makes two improper presumptions. First, that a good growth company’s stock usually rises steadily – or at least every couple of months. Second, when a stock stalls for a period of time, it is the harbinger of a reversal.

Actually, a “stall” is a natural occurrence. Here’s why and how we should view such periods …

This article is posted on SeekingAlpha.com

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