Apple Inc. (AAPL), Amazon.com, Inc. (AMZN): Different Attitudes Towards Fibonacci Ratios

Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) have caught CNBC’s Jim Cramer’s interest. Mad Money’s host analyzes the charts in an unusual manner, which implies the usage of Fibonacci Time and Price Analysis. This particular technique is made available by Carolyn Boroden on her website and seems to present sufficient explanation on price fluctuations to Cramer.

We’re off with Apple Inc. (NASDAQ:AAPL), which has seen its price follow an unpredictable pattern starting with the second of this month. Its value  is currently around $101, down %0.76 throughout September 16^th. As Mr. Cramer explains, there are many hedge funds looking to raise their liquidity in order to pile up shares in Alibaba (BABA) and Apple Inc. (NASDAQ:AAPL) is a core holding of these funds, thus some sell the Cupertino, California-based tech giant in order to get a piece of the Chinese e-commerce colossus. Moreover, the former company is still worth buying, even at this level, not just due to new products, but also because Fibonacci ratios are on its side. So how does this work?

“Boroden looks at the size of the previous swings in the stock’s price then she runs those moves through the prism of the Fibonacci ratios I just mentioned [23.6%, 38.2%, 50%, 61.8%, 100%] to find key levels where a given stock is likely to change course,” said Jim Cramer.

The prediction is bound to a certain percentage ratio from a swing, which happened recently thus anticipating a bump in Apple Inc. (NASDAQ:AAPL)’s price up to $133 or $128, depending on which ratio the swing will be repeating.

Now, Amazon.com, Inc. (NASDAQ:AMZN)’s stock price has been put to the same analysis and the good news couldn’t be reproduced.

“This is one source of Alibaba funds that’s directly impacted by healthy Alibaba and is surely doesn’t bear up to close scrutiny versus his Chinese rival. Put simply, if you like Amazon, you should love Alibaba and sell the Amazon for the Alibaba,” stated Mr. Cramer.

Another reason for such a bearish attitude is the fact Amazon.com, Inc. (NASDAQ:AMZN)’s price is currently below its 200 and 50 day moving averages.

Disclosure: none

 
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