Apple Stock Watch - High Volume Break Out Rally Boosts AAPL

by , 5:15 PM EDT, August 31st, 2000

The stock markets day by day inched forward through out the month of August, mostly on the backs of nervous retail investors. Finally, mutual fund managers said— what the heck, if you can't beat 'em, you might as well join 'em, so the big funds bought heavily on this last day of month. Apple's stock surged powerfully ahead, clearly pummeling resistance in the upper $50 range.

Money that has been sidelined for months is just now beginning to return to market and as before the technology stocks are leading the way higher.

Mark Jakob, a former employee of Internet Wire was arrested today for the Emulex (EMLX) hoax that last week crashed the stock intraday until the fraud was revealed. AP reported, "A man suspected of putting out a phony press release last week that sent a high-tech company's stock plummeting with lightning speed was arrested by the FBI and accused Thursday of making nearly $250,000 on the scheme."

Apple moved steadily higher all day, climbing 1 7/16 to close at 60 15/16 on high volume of 7.4 million shares. AAPL hasn't looked back since it turned higher on August 16th from a low of 46 13/16. Apple's stock is up about 20% this month. But that's just average for the computer hardware stocks. Gateway rallied 25%, IBM gained 18% and Compaq soared 22%.

Steve Wozniak will be honored for his invention of the Apple II at the National Inventors Hall of Fame's induction ceremony on September 9th.

The Nasdaq soared 102 points (2.50%) to close at 4206 on highest daily volume of August at 1.8 billion shares.

The Nasdaq ended the month higher by 11%, for the its best August performance in 10 years. The Nasdaq burst through the 4180 resistance level and many market technicians are targeting 4400 as the next area of strong selling pressure.

The Dow rallied 112 points (1.01%) to close at 11215 on volume of over a billion shares. J.P. Morgan added 75 of those points to the Dow today by surging 7% on take over rumors. The tech stocks on the Dow, like IBM and HP, also contributed to the rally as well

The S&P 500 jumped 15.09 points (1.00%) to close at 1517.68.

In Apple related businesses: Akamai climbed 3 1/16 to 75 9/16. Wit Sound View initiated coverage on Akamai with a buy rating and a price target of $85 per share. The brokerage firm set a 2000 earnings estimate for the Internet content streaming business at a loss of $2.16 per share and a 2001 estimate of a loss of $2.88 per share. Shares of Akamai are well below their 52-week high of $345-1/2.

Akamai stock isn't out of the woods yet. 58 million shares of Akamai or 56% of the total shares outstanding will be unlocked for sale on September 13th by insiders who acquired shares during the IPO process.

As Red Herring points out, "There are some investors -- particularly venture capitalists eager to cash in on their investments -- who hungrily await the end of the lockups so that they can sell their shares and lock in their gains. Remember, most insiders, which typically include the institutional investors and the senior executives, got their stock for pennies on the dollar, so even a new IPO trading at $8 per share represents a profit to such investors."

Earthlink fell 1/4 to 11 1/4 after yesterday's big gain. Motorola climbed 7/8 to 36 1/8. Shares of IBM gained 1 11/16 to 132 dollars. Oracle scored a new 52-week high, soaring 2 11/16 to 90 15/16.

Apple's competitors: A Bloomberg report said, "Globo.com, the Internet arm of Latin America's largest media group, and the Caixa federal bank are planning to provide Brazilians with $877 million in credit to purchase personal computers...Globo.com expects the credit line could attract as many as 1 million new computer users in Brazil, the company said. That could be a boon to computer makers such as Compaq Computer, Dell Computer and others that manufacture PCs in Brazil."

Dell gained 3 11/16 to 43 5/8. Gateway was higher by 2.3 to 68.1. Compaq gained 13/16 to 34 1/16. Shares of Microsoft dipped 3/16 to 69 13/16. Intel climbed 1 3/8 to 74 7/8.

In economic news: US durable good orders fell a record 7.5% in July. Durable goods orders are a measure of orders for items that last three or more years. A 6.8% decline was expected by economists, but the record fall off in orders was taken as a signal to Wall Street that the Fed is probably not going to raise interest rates again this year.

However, the Wall Street Journal was cautious, "financial markets, and Federal Reserve policy makers, are likely to look past Thursday's economic data as they await Friday's release of employment figures for August. The more up-to-date jobs figures are seen as giving a better clue to the near-term path of the economy."

The Mac Observer Stock Watch Virtual Portfolio is back in the black for the first time since July.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.

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