AAPL, What Does Warren Buffett See?

Warren Buffett buys stake in Apple
    By CNN/Money
by Paul R. La Monica   @lamonicabuzz May 16, 2016: 10:57 AM ET

Is Warren Buffett calling a bottom in Apple's stock price?
 
Berkshire Hathaway (BRKA), the conglomerate run by Buffett, disclosed in a regulatory filing Monday that it purchased more than 9.8 million shares in Apple (AAPL, Tech30) during the first quarter. It marks Berkshire's first investment in Apple.

Berkshire acquired its position at an average price of about $109 a share.
But the value of that investment, originally worth around $1.1 billion, has already dropped significantly. Investors have been worried about slowing demand for iPhones after Apple reported disappointing earnings last month.
Apple's stock price has since fallen to just above $90, meaning that Berkshire's stake in Apple is now worth about $888 million.
Shares of Apple are down 14% so far in 2016, making it -- along with Intel (INTC, Tech30) and Goldman Sachs (GS) -- one of the worst stocks in the Dow this year.
Apple competitor Alphabet (GOOGL, Tech30)-- the parent company of Google and owner of the Android mobile operating system -- recently overtook Apple as the world's most valuable company as well.
Related: Buffett backing a group bidding for Yahoo
Still, shares of Apple, which hit a new 52-week low on Thursday, rose more than 3% in early trading Monday on the news of Berkshire's stake. That move vaulted Apple back ahead of Alphabet in the market cap race.
The Apple purchase is the second big tech investment by Berkshire, which has been steadily adding to its stake in IBM (IBM, Tech30) during the past few years.
  
JustSignals Comments

In the AAPL chart above,  the vertical yellow highlights indicate where AAPL was oversold over the last two years.  AAPL during this period did rally subsequent to these periods.

Courtesy of ChaikinAnalytics.com

In the AAPL chart above the short term is also oversold.  But, at the time of this writting AAPL was up about 3% after the news of Warren Buffet was in the news.
But this chart indicates weakness in AAPL.   So what does Warren Buffet know that we don't?

Buffet is known as a value investor.
Buffet buys on weakness and sells into strength.
JustSignals will be keeping an eye on this stock.

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