Calling Bottom on Apple Is a Dangerous Sport

Apple broke below $419 within seconds of trading on Wednesday. A few minutes later it was trading well below that.

I was an idiot for arguing that $419 would be the stock's low last month. I was on CNBC just minutes after Apple hit what then was its 52-week low, suggesting that Apple would hit $1,000 before the higher-priced Google. Later that day I would go on to write about the five reasons why Apple stock had indeed bottomed out.

I was wrong, of course.

That March 4 low held until today, and a few factors are weighing on the hit.

  • DIGITIMES -- the Asian tech publication that's well connected to Apple's suppliers -- is reporting that iPad shipments may dip by as much as 30% sequentially. Upstream sources are telling DIGITIMES that demand has been softening for the smaller tablet that was an initial hit during the holiday season.

  • Cirrus Logic warned of a big inventory charge in the quarter. As the company that provides audio chips in Apple's iPhone, the news is being interpreted as soft demand for Apple's iconic smartphone.

  • Samsung -- the biggest thorn in Apple's side when it comes to smartphones -- announced this morning that its Galaxy S4 will be available through seven stateside wireless carriers later this month. The bar-raising smartphone is powered by Google's Android. Many of the leading carriers were already starting to take pre-orders for the device, but it wasn't clear if it would hit the market this month or potentially early next month.

  • Analysts at Bernstein Research and Goldman Sachs offered up earnings preview notes ahead of next week's quarterly report. As one might imagine, the tone is cautious.

Expect the volatility to continue until Apple actually does report on Tuesday, and then, naturally the shares will move higher or lower based on the report and the tech bellwether's assessment of what its near-term future looks like.

Is today's low the final bottom? Apple shares are definitely cheap, but after being burned by last month's call, it may be best to wait this out until we see how the fallen consumer tech darling is actually doing.

Got Apple? Get smart.
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Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Cirrus Logic, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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