Beware, Apple Investors: The Stock Has Moved Up Too Far, Too Fast

NEW YORK (TheStreet) -- The change in Apple (AAPL) investor psychology that has occurred in the past two months is truly remarkable.

In April, a lot of market prognosticators said Apple was dead money until the fall, when Apple would unveil new products (such as an iPhone 6 and iWatch). They assumed that sales of the old iPhone 5s and 5c would be lackluster and wouldn't drive the stock.

Instead, this consensus view got turned on its head in late April when Apple's latest earnings result showed a surprisingly high number of iPhone sales, along with news of a 7-for-1 stock split and another increased buyback.

Almost immediately, the stock started to run up -- from a split-adjusted $75 before the earnings release to about $92 today. It even got to more than $94 earlier this month.

That's a more than 25% gain from before earnings to a few days ago. And don't forget that we're talking about a company with a $553 billion valuation.

That's huge.

Although I am an Apple fan and a believer that the new iPhone will spawn a massive upgrade cycle and that the iWatch will be a big success, I can't get excited about owning Apple's stock here after such a big move in such a short time.

History shows that big moves in Apple are followed by long periods of consolidation.

In late 2010, Apple's stock ran up 29%. Then it treaded water for nine months.

Then, starting in mid-2011, Apple's stock quickly ramped up 22%. It then stopped advancing and stayed stuck in park for about six months.

Then, going into 2012, we got the mother of all Apple moves. In the first three months of 2012, Apple's stock ramped up 57%. It then declined and recovered over the next four months, before having a final 10% run through mid-September. And that's what set the table for the 45% decline over the next year or so. And we are still waiting to get back to the all-time highs touched in September 2012.

I think, given the recent 25% move, we're into a new period of consolidation for Apple. This most recent move has been driven more than anything by the stock split news. You can say the market isn't being rational, but sometimes these things happen. People wanted to own this stock ahead of the split date, for whatever reason.

If history is a guide, this quick ascent of Apple won't continue. We've hit a plateau here. It's time to pause and wait for the next wave of news that will move the stock, either up or down. I think that's going to be sales info on the actual iPhones and new iWatches.

If I'm right and both are hungrily bought up by the Apple army of fans, I see Apple moving well beyond its all-time highs by the end of the year. But until then, this stock snoozes.

At the time of publication, Jackson had no positions in stocks mentioned.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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