Analyst Predicts Apple Inc. (NASDAQ:AAPL) Shares Will Fall Sharply Over 2020
Although Apple was the 2019 star of the Dow Jones Industrial Average, tech investor Paul Meeks calculates that the stock is worth much less than $290 a share.
“I value the company at about $170 a share, believe it or not,” Meeks, the portfolio manager at Independent Solutions Wealth Management, told CNBC on Monday (Dec. 30). “We’re talking about a company that based on my model is about $100 per share overvalued.”
Meeks said he would only consider buying Apple shares if they dropped a minimum of 40 percent from current prices.
“People are excited, perhaps too much so, as the company transitions from a hardware product iPhone-dominated company to … a software as a services company,” he said. “The stock is overpriced.”
Shares in Apple have skyrocketed 85 percent in 2019, with 20 buy ratings from analysts against six sell ratings and 10 neutral, according to FactSet, per CNBC.
“The iPhone business continues to deteriorate,” Meeks said. ”[It’s] very akin to the slowdown in maturity that we saw in the PC market as we kind of went from the ’80s to the ’90s.”
He expects that weak earnings reports over the next year will bring about a sharp market correction.
“The last time we saw nice growth in global smartphones was back in 2015,” he said. “It’s not healthy. It’s not a growth market.”
Apple is confident that strong sales of its Apple Watch and AirPods will be the ticket to drive up the company’s stocks in 2020.
Citi Analyst Jim Suva said watch sales will come as a “surprise” to investors during the first fiscal quarter of 2020, which will help Apple’s stocks continue to surge and move the company closer to Suva’s $300 price target.
On Monday (Dec. 30), Apple’s stock was up 0.5 percent at about $291 per share. The stock was up 84 percent this year overall, making it the best performer in the Dow Jones Industrial Average.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 266.94.
The projected upper bound is: 302.98.
The projected lower bound is: 286.61.
The projected closing price is: 294.79.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 82.6745. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 81.00. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 23 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 130.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed up 2.130 at 293.650. Volume was 4% below average (neutral) and Bollinger Bands were 66% wider than normal.
Open High Low Close Volume___
289.930 293.680 289.520 293.650 25,247,624
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 285.28 265.11 219.17
Volatility: 14 20 29
Volume: 30,929,196 25,496,748 27,300,410
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
APPLE INC is currently 34.0% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AAPL.O (mildly bullish). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 92 periods. Our momentum oscillator is currently indicating that AAPL.O is currently in an overbought condition.
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