Apple Bears: We Were Just Freaked Out Over 'Fiscal Cliff'

NEW YORK (TheStreet) -- I hope this article crosses your feed before the parade starts on CNBC. Before Wall Street hack analyst after Wall Street hack analyst explains away their pathetic, reactionary and irresponsible Apple (AAPL) words of caution from December.

Dude. That was so last year, they'll say!

Citi's price target of $575 looks pretty good though, doesn't it!?

In all seriousness, here's where we're headed with AAPL. Higher. Much higher. And here's how it will go down.

The stock runs ahead of holiday quarter earnings, which Apple reports at the end of the month. On the blowout report, it's anybody's guess. Nothing surprises me on Apple earnings.

Sell the news. Pop, stop and drop. Stagnation around $600 to $650 or, if things really go wild, new highs. I don't know. Mere mortals cannot predict what Apple will do on earnings. However, it's a little less cloudy, even if erratic, the rest of the time.

Sanity returns to the market on the "fiscal cliff" deal with the clear retail winners leading the way -- Apple and Amazon.com ( AMZN). Other retailers, not quite so hot. But you cannot expect this trend to last.

There was no good reason for AAPL's and, to a lesser extent, AMZN's struggles in December. It was all noise and hysteria. Sometimes in the stock market, like in life, you just have to go with the obvious. Trust what you see in front of you. And, for the entirety of the holiday quarter, it was clear -- there was Apple and Amazon and everybody else.

Apple retail stores were beyond packed, particularly as we approached Christmas. That reality did not abate between Christmas and New Years. And Amazon absolutely dominated online commerce: For goodness sake, the company recorded 24.6 million visits to its Web site on Christmas Day. Walmart ( WMT) came in a "close" second at 7.4 million.

But clear and obvious only works in horseshoes and hand grenades. Not this stock market.

AAPL and AMZN will rally, but, namely for Apple, "concerns" and "caution" will reenter the picture. People will question the efficacy of releasing a new iPhone too soon. Now, that's a legitimate concern, but it's a long-term concern. I'll drill this down in a separate article, but a new iPhone -- done sort of "right" -- will dominate as much, if not more than previous iterations.

Again, the thinking on AAPL should be, there's no reason to sell this thing until we have proof the company has beat itself (because the "competition" isn't doing it) and damage lurks imminently. That's not happening for quite some time.

However, just as investors must see the obvious vis-a-vis Apple's dominance, they need to bring a clear mind to the assessment of individual stock ownership.

In a perfect world, you should be able to buy and hold AAPL. And, despite the wild gyrations, you pretty much have been able to. Sure, if you held steady in 2012, you left some money on the table from September through the end of the year, but you still recorded considerable gains. And now, early in 2013, you're making up what you "lost" on paper.

AAPL shouldn't go up in a straight line. No stock does. No stock should. But it also should not be as volatile as it is. But, it is. So what do you do?

That's a personal decision based on your financial situation and risk aversion. But, one thing's for sure, it might not make sense to be a pure buy-and-hold investor, even with AAPL.

Keep a core position maybe, but trade in and out of a significant chunk. I'm not talking nimble day or even swing trading. I'm talking, "hey look, that lot is up 35%, let's not press our luck because even though the other guy is an idiot, he can still make money in this market."

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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