As Apple nears a $2 trillion market valuation, trader is wary of one factor

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As Apple nears a $2 trillion market valuation, trader says one factor has him trimming his position $AAPL (via TradingNation)

" on Monday. "So the question investors should be asking themselves is how to manage this risk. And for us and our clients, we've been trimming the position as it continues to go up."

Tepper says valuation is one of the top fundamental reasons to consider taking some money off the table on Apple. "All of the returns over the course of the last 18 months have come from multiple expansion. So, 18 months ago we were at about an 11 on the forward PE, now we're at [30] times," said Tepper. "It's important to trim your position so it's not a ridiculous overweight. It's always a good thing to play with the house's money."The technical case for more gains in Apple remains strong, though, says Blue Line Capital President.

"There's lot of tailwinds here, technically, but one thing you want to look at too is there's a bull flag after its post-earnings run," Baruch said during the same "Trading Nation" segment. A bull flag is formed on the charts when a stock enters sideways consolidation or a slight downturn after a strong uptrend. It suggests the continuation of the uptrend move."That bull flag over the last week and a half has created a new fresh breakout, so what we're looking at in the near term if you're trading this is about $478 and then $499 are your two upside targets.

 

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