After a breathtaking month-long run in AAPL which has seen it gain over $23 ($161 pre-split!) since the October 15 low of $95.18, the stock is now poised to take out the $120 level, having already hit a high of $119.75 this morning and surpassing the $700 BILLION level in market cap, the first time any company has ever reached that size. Sentiment on StockTwits has reached euphoric levels, with some users commenting “$125 by end of this week possible!”, “I’m buying a Lambo if this hits $125!”, and “Looks so cheap now on its way to $150!”. Of course, a flurry of well-timed upgrades by analysts has helped as well. Before you get caught up and chase the feel-good rally, note that the RSI is now at a blistering 87 (an RSI over 70 is considered overbought territory), and the charts show the prices peeking over the upper Bollinger Band, with stochastics also flashing overbought levels. This rally may also be spurred by anticipation of strong Black Friday sales after Thanksgiving this week, as well as Cyber Monday, but after that there may well be a consolidation or pullback. Of course, there’s always the beginning of December and the ‘Santa Claus’ rally to take into consideration, but the markets have continued to power to new all-time highs, helped also by China’s central bank cutting interest rates for the first time in two years, as well as ECB’s Mario Draghi commenting on more government bond-buying.
In commodities, oil is hitting lows again today, ahead of the OPEC meeting on November 27 (Thanksgiving- coincidence?). Gold has been holding a tight range just around the $1,200 level, and the next major news event the market seems to be anticipating is the Swiss referendum on Sunday, which may provide some impetus for the next move. Natural gas has also been extremely volatile, spiking over 5% last Wednesday after reports of more cold weather, with a net draw of 17bcf shown on Thursday’s EIA inventory report, but plunged back down on Friday and yesterday after new moderating weather reports came in and the futures contracts rolled down to January. This has spurred heated debate in traders of UGAZ and DGAZ alike, both of which have seen tremendous daily swings of 12%+, and it looks like it won’t be settled anytime soon.