Apple Inc. (NASDAQ:AAPL) a Strong Buy Heading into Earnings?
Apple’s AAPL run over the last year, up over 100%, is impressive by its own lofty standards. AAPL shares have surged despite the fact that its fiscal 2019 sales slipped 2%, against a hard to compare 2018.
With Apple’s first quarter fiscal 2020 financial results due out on Tuesday, January 28, it’s time for investors to see why AAPL stock appears to be a strong buy.
More Than an iPhone Company
Apple can thank the iPhone for its $1 trillion market cap and its gigantic pile of cash. The Cupertino, California-based firm’s ability to sell high-priced smartphones and other consumer electronics in a crowded market is somewhat remarkable. CEO Tim Cook and Apple have continued to cultivate the brand and customer loyalty that sees people pay over $1,000 for new iPhones, despite fewer game-changing updates recently.
The company’s new wireless AirPods headphones have also become a hit, while it innovates its Apple Watch— which could one day attract more users for its health-focused features. But more than anything else at the moment, Apple’s services business has driven the stock as it becomes its largest growth unit.
Apple’s services segment features its app store and Spotify SPOT challenger Apple Music. More recently, the firm has introduced a subscription-based video game service, an Apple credit card, and more. Plus, Apple TV+ (which launched in November) hopes to compete alongside Netflix NFLX, Disney DIS, Amazon AMZN, and others in the streaming world for years, if not decades to come.
Apple’s long-term goal is to generate more revenue from its roughly 1 billion active devices. “We now have 450 million paid subscriptions across the services on our platform compared to over 330 million just a year ago, and we are well on our way to our goal of surpassing the 500 million mark during 2020,” CFO Luca Maestri said on the company’s Q4 earnings call.
Apple executives have been pleased with the iPhone 11’s early success, and analysts are calling for the iPhone 12 to feature some of the biggest updates in years. Plus, AirPods sales are set to climb alongside its growing services unit.
AAPL’s positive earnings estimate revision activity helps the stock earn a Zacks Rank #1 (Strong Buy) at the moment. Some investors might want to wait for Apple to cool off, but that might not happen until the market does, and who knows when that will be.
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 284.59.
The projected upper bound is: 325.06.
The projected lower bound is: 307.73.
The projected closing price is: 316.39.
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 67.2780. This is not an overbought or oversold reading. The last signal was a sell 1 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 76.89. 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 34 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 93. This is not a topping or bottoming area. The last signal was a sell 1 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 22 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed up 3.900 at 315.240. Volume was 1% below average (neutral) and Bollinger Bands were 82% wider than normal.
Open High Low Close Volume___
313.590 315.700 312.090 315.240 27,207,254
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 307.50 278.39 225.61
Volatility: 23 19 29
Volume: 33,394,926 27,041,110 27,266,766
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 39.7% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of AAPL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 103 periods. Our momentum oscillator is currently indicating that AAPL.O is currently in an overbought condition.
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