If recent history is anything to go by, it pays to buy Apple shares whenever the stock drops.
Apple shares slipped on Monday, following an analyst report that the company was cutting orders from suppliers of parts for its iPad tablet. In the research note that came out of Asia, JPMorgan Chase said several suppliers had indicated, in the past two weeks, that Apple lowered fourth-quarter iPad orders by 25 percent.
As the market surged Tuesday, with the Dow Jones Industrial Average gaining 147 points, Apple shares were down. Apple shares closed at $399.26 on Tuesday. From a larger perspective though, they have gained 19 percent since June 30, in a quarter that has seen the S&P 500 drop by almost 9 percent.
This could be a signal that Apple stock is be getting ready for a drop on or around the iPhone 5 release date, which could come at an Apple presentation next Tuesday. This means the next buying opportunity could be around that date.
On a long-term basis, Apple shares should be rising because of the exceptionally strong consumer demand for its products. Apple has overtaken Exxon as the most valuable company in the U.S., with a market capitalization of $370.2 billion, as compared with the oil giant's $354.5 billion.
The new iPhone could be Apple's best-selling product yet. Apple is unveiling a new model 16 months after the iPhone 4 debuted, compared with the 12 months between previous model updates. This may be the last time Apple can wait so long between new iPhones, as rivals, including Samsung Electronics Co. have introduced competing smart phones using Google Inc.'s Android operating system.