Beware the Second Market Crash of 2020

Beware the Second Market Crash of 2020

The Signs are There

Halfway through the month of September 2020, and a few weeks after AAPL did a 4 for 1 stock split, the price action has been moving south. Why? Well, stock splits can do that to a top performing stock, and I’m sure that in the long term the stock will bounce back.

Meanwhile…

AAPL has been going through some rough patches, and since the stock split it has fallen from a high of 138.55 down to 106.09 earlier today!

And if you look at the 1 year chart for AAPL, we can see what looks like a repeat of March 2020. The Godzilla Crash!

See the two circles in the chart below…

I’m Not Too Worried…

A stock’s price goes up and down like the ocean tides, but in the grand scheme of things, eventually a top performing stock––and one that has a market cap of 1.8 trillion––is bound to bounc back, so while the price is low, it might be a good idea to buy some shares (or more, if you already own AAPL).

This current crash, or market correction if you will, is only temporary, but yes there are other outside factors that could complicate things… a presidential election for one, and also the covid-19 pandemic and its developments.

Should You Buy Apple Now?

I would wait… it could go down to 100 or lower, judging by the technicals. RSI is down to around 30 so it’s been oversold which means it’s generally a good buy. How long RSI stays down is a good question, but those intent on buying AAPL should really watch the stock now. There was a lot of buyers toward the end of Friday’s trading session, so that’s a good sign.

Pre-Split, AAPL was over $500 a share. Now it’s a bargain for investors. Buy and hold for the long term, or cost average and buy a few shares each quarter. Most top performing stocks tend to go up most of the time, unless it files for bankruptcy or gets taken over by a larger company. Apple is at the top of the tech food chain. And has a large moat around it, as Warren Buffett would say… and speaking of Warren Buffett… he has some 245 million shares or more, and hasn’t sold all of it yet. And that’s saying something.

Image by Gerd Altmann from Pixabay

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randomguru

Portfolio Manager & Musician

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