The current market trends are suggesting that Apple Inc. (NASDAQ:AAPL), which has been doing very well lately, and International Business Machines Corp. (NYSE:IBM) are two of the companies that face a great boost in stock values. Jim Cramer of CNBC, in his “Mad Money” program, suggests why looking at the charts right to the last detail will not work in the long run. He says that to know how a company’s stocks will turn, you need to know something about the companies in a deeper sense. But sometimes, the forecasts of conventional chart watchers could be wondrously accurate, as in the case of Carolyn Boroden, who runs a stock forecast website. Boroden has established her name in the accurate forecast of Apple Inc’s stock previously.
“When it comes to Apple, Boroden has earned her title. She has become the queen of calling this stock. The last time we checked in with her, it was back in January 13. Apple was trading at $535, and she told us using her disciplined mathematical method that the stock could dip slightly below $500 and then rocket up to as high as $603. Sure enough, couple of weeks later, Apple bottomed to $499 and then began to climb steadily until it hit $604. Isn’t that incredible? I mean, right almost at her target” said Cramer.
Cramer called in Boroden again to get suggestions on where Apple Inc. (NASDAQ:AAPL) is heading. Boroden uses a mathematical method to calculate stock forecasts, based on the Fibonacci series, which is a natural phenomenon observed in plants and animals. Boroden believes that this series to be used to determine stocks too. Boroden runs the previous stock history of any company through a Fibonacci series setup and uses it to determine forecasts, and they seem to be accurate most of the time.
Boroden feels that Apple Inc. (NASDAQ:AAPL) is due for a temporary pullback. As soon as Apple Inc just broke above $597 on Friday, it marked a 127.2% retracement of the previous December – January decline. A Fibonacci retracement of anything above 100% is called an extension by chartists. Boroden feels that Apple Inc. (NASDAQ:AAPL) has hit a key Fibonacci extension point and hence there are chances that it can go up till $625, but is in a vulnerable position and the likelihood that it faces a down is more. Cramer seconds Borodens’s prediction through his references of her previous predictions on Netflix, Inc. (NASDAQ:NFLX) and LinkedIn Corp (NYSE:LNKD), which turned out to be accurate.
But Boroden feels such downsides are temporary, because when a stock hits a Fibonacci extension and drops, it is temporary and it could very well rally to a high. She feels this is what is currently happening to International Business Machines Corp. (NYSE:IBM), which hit three Fibonacci extensions with its recent drop in February. Cramer suggests that IBM is extremely buyable right now and applying Boroden’s Fibonacci theory, International Business Machines Corp. (NYSE:IBM) stocks face a confluence of Fibonacci time cycles before Friday, and so International Business Machines Corp. (NYSE:IBM) will probably stop its decline pattern and start rallying by the weekend.
To finish it, Apple Inc. (NASDAQ:AAPL) is headed for a temporary downside and it is advisable to be cautious on it, while International Business Machines Corp. (NYSE:IBM) is bound to rise by the weekend and being more bullish on it will prove advantageous.
Check out the full Jim Cramer and Boroden interview below: