Analysis: AAPL

In today's special Action Alerts PLUS Daily Rundown, TheStreet's editor in chief Sara Silverstein and AAP team member Stephen Guilfoyle preview Apple's (AAPL) WWDC 2023.

SARA SILVERSTEIN : Good morning, members. AAP Team Member "Sarge" Stephen Guilfoyle, joins me now to break down everything you need to know ahead of Apple's Worldwide Developer Conference. Apple has called WWDC 2023 its biggest and most exciting yet. What would you get excited-- what would make you get excited about the stock, Sarge?

STEPHEN "SARGE" GUILFOYLE: Oh, I think the real Apple diehards will be excited that they're coming out with a new headset, supposedly. They're going to upgrade the software for the iPad, for the iPhone, for the Apple Watch, and a number of other products. They're coming out with a new line of Mac PCs that will run on their own semi-conductors that they made themselves.

So from their perspective, they're kind of excited. From the consumer's perspective, they are probably a few things some folks will be interested in. I don't think that the headphone will catch on right away. From the trader and investor perspective, I think-- I'm a shareholder, OK? So I'm saying something here that might be against my own best interest. But I see a little bit of trouble going ahead into the next week for Apple as they run this show from the 5th through the 9th.

If you could look at the chart, folks, at home, you'll see that this year, we have a rising, narrowing wedge forming in the stock. All right? That means that as the stock has risen, the lows have risen faster than the highs. So the lows are catching up to the highs. That means we have a closing pennant, basically, in an upward formation since the beginning of the year.

Trading volumes have also decreased during that time. When this pattern happens, more times than not, in my experience over a long career, it's ahead of a downturn. This is a pattern of bearish reversal. Now, I don't see Apple-- you know, from everything we're seeing and everything they're saying and the way the stock is moving-- heading downward, but the chart is telling me that Apple is coming to a point where it's going to pop, one way or the other, and the chart's saying right now, it may sell off.

So if you're a trader, you may want to look at that 21-day exponential moving average-- which I believe right now is running around 173, with the stock much higher than that, or even the 50-day down around 167-- as potential points of entry, or maybe where, if you're reducing that basis on a long position, maybe you want to sell puts there, if you're not afraid to add to your position at those levels. But I don't think this is a point of entry for someone not already exposed to the name.

SARA SILVERSTEIN : Right. AI has been such a big focus for big tech, but not as much for Apple. Is this intentional, or are you expecting an AI surprise from Tim Cook?

STEPHEN "SARGE" GUILFOYLE: Well, the keynote addresses is on Monday morning, and I think they have a state of the union just Monday afternoon. So Tim Cook is going to have to be aggressive, because every other megacap name is talking the AI game. Whether they're really caught up on AI or not, they're all making believe they are. And this is kind of like blockchain a couple of years ago, or the internet when I was a younger man. Everybody wants to make believe they're in the name, whether they are not.

So I'm sure Apple is working on something. Maybe they're even-- you know, they're working on deals with, let's say, Broadcom, which reported last night, or some other chip producers, that maybe produce a higher, more elite level of GPU than, let's say, Apple is capable of at this time. So there probably is something in the works that they would spring on us because, let's face it-- if they don't say anything about AI, then this chart I just talked about will come to fruition, because investors are going to expect them to at least try to keep up with their peers.

SARA SILVERSTEIN : And historically speaking, are there any lessons, looking back at past Developer Conferences and the performance around that, that members should be taking into account?

STEPHEN "SARGE" GUILFOYLE: I don't know specifically related to this conference, but I do know that throughout the last 30 years or so, every time I've gotten completely out of Apple-- it's OK to sell on peaks and add on dips, but every time I've gotten myself-- except for maybe one time, I actually did very well. But most of the time, I have failed to get back in below where I sold, because I waited too long.

So in my opinion, if you're long in the name, like I am, it doesn't make that much sense to exit the name completely. It might make sense to exit on a high, like we're having today ahead of the conference, of just a portion of your shares-- let's say, an 1/8 of your position at a time, because I don't like to move in large increments-- just so you take a little bit of a profit in case this chart proves truthful. But in case the chart doesn't prove, you still own most of your position going forward. So it's a way to hedge your bets. It's a way to play it safe.

SARA SILVERSTEIN : And is the event just create-- headlines that create buying or selling opportunities, or is it-- can it change the trajectory of where the company is going?

STEPHEN "SARGE" GUILFOYLE: Well, I mean, if they produce something truly revolutionary, which I don't think they have at this one, unless they've completely kept it hidden. Yeah. It could change the trajectory of the stock, but I think the idea, as they are the greatest consumer electronics company of all time, is to introduce new products of interest to consumers who can afford these things.

So what they're doing is going after not guys like myself, who will trade on this-- maybe portfolio managers, who can move a lot more money than I can-- but really, they're going after Mom and Dad, sister and brother. And they're trying to sell hundreds of millions of devices to the public at ever-increasing margins, which is why they introduced the whole service sector, which is why they will basically almost lease you these products now instead of sell them, so they get recurring revenue out of it. So yeah. What they're trying to do is raise investor awareness-- raise consumer awareness, which, in turn, raises investor awareness.

SARA SILVERSTEIN : Great. So much to think about heading into today's keynote. Thanks for joining me, Sarge.