NEW YORK (TheStreet) -- Every December traders are fixated on two things: protecting gains and adjusting portfolios based on next year's projections. And as traders protect and project, that can sometimes cause volatility in individual stocks. And that volatility can be misleading for value investors.
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There are so many traders loaded to the gills with Apple stock that if it goes down, those traders may end the year in the red.
If there was a fundamental change in Apple, we would have seen a major move in the Nasdaq (QQQ) and the S&P 500 (SPY) , but that didn't happen. There was no bad news about the company. The price drop had nothing to do with bad sales or a firm lowering projections. It was all based on price action.
We also tend to see some of the bigger portfolio winners start to either make moves higher or drift lower without any real reason. This is because traders are either adding to winners that they believe will be even bigger next year or they are moving them out of their portfolios because they believe the stock may have run its course.