Apple Inc. (NASDAQ:AAPL) best Dow stock of 2019 but can it repeat in 2020?
Apple CEO Tim Cook shocked investors on January 2 by warning of slowing iPhone sales in China. Apple’s stock plunged 10% the next day, dragging down the entire market along with it. But it’s been all good news for the company ever since.
Shares of Apple hit their lowest point of the year — $142 — on January 3. The stock now trades at about $270.
Apple is up about 70% in 2019, making it the best performing Dow component by a fairly wide margin. Apple rival Microsoft, with a 50% gain, is in second place. (Both companies are now worth well over $1 trillion.)
Although iPhone sales have slowed lately, there is growing excitement about the possibility that new models will reignite growth.
There have been reports in recent weeks about a 5G iPhone planned for 2020. Analysts have also been discussing the likelihood that premium versions of new iPhones will drop the lightning charging cable and port by 2021.
But even if the iPhone 12 (assuming that’s what Apple calls it) fails to lead to a massive upgrade cycle, Wall Street is excited about the fact that the company has been able to get existing users to pay for more subscription services, like Apple Music, iCloud, the App Store, Apple TV+ and Apple Pay.
Services revenue grew 18% in Apple’s most recent quarter, while product sales fell slightly. Revenue from services now account for just under 20% of Apple’s total sales.
Of course, it would be nice if Apple started to sell more devices again. But some analysts still think the company can continue doing well even if that doesn’t happen.
“Apple will continue to focus their efforts on services and installed base growth,” said Citi analyst Jim Suva in a recent report. “Simply put, investor expectations for iPhone segment growth are not high.” Last week, Suva boosted his price target to $300 a share, nearly 15% above current levels.
Trade war may not hurt Apple
Still, what about trade tension between the US and China?
After all, Apple’s stock plunged in early 2019 because of worries about increased competition from Chinese smartphone rivals such as Oppo, Vivo and Xiaomi. Fears of more tariffs have further dimmed the outlook for Apple in China.
But Tom Forte, an analyst with D.A. Davidson who likewise has a $300 price target on Apple, isn’t concerned. Forte points out that Apple is such an important company to Chinese component manufacturers that it has lots of leverage in trade talks.
“Apple has done an amazing job, to date, minimizing the impact of tariffs on its business, which we believe is due to the fact, among others, that it is the only company with the muscle to effectively lobby both the U.S. and Chinese governments because of its influence in both countries,” Forte said in a report last week.
Not everyone is convinced that Apple’s best days are ahead of it. In fact, the stock is a polarizing one for Wall Street analysts.
While 26 analysts currently have Apple shares rated as a buy, according to Refinitiv, another 13 are recommending it as a hold while four analysts are calling for investors to sell it.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 276.89.
The projected lower bound is: 258.88.
The projected closing price is: 267.88.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 33 white candles and 16 black candles for a net of 17 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 82.9869. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 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 59.74. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 8 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 86. This is not a topping or bottoming area. The last signal was a sell 0 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 sell 13 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed down -3.790 at 266.920. Volume was 21% above average (neutral) and Bollinger Bands were 53% narrower than normal.
Open High Low Close Volume___
270.000 270.800 264.910 266.920 32,182,644
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 265.43 249.49 211.42
Volatility: 26 23 29
Volume: 22,267,756 24,903,304 27,043,118
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 26.3% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 77 periods.
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