Apple Inc. (NASDAQ:AAPL) might be a good time for investors to consider buying

Apple Inc. (NASDAQ:AAPL) might be a good time for investors to consider buying

Apple Inc. (NASDAQ:AAPL) might be a good time for investors to consider buying

Shares of Apple AAPL jumped over 3% Monday after Bank of America BAC upgraded the iPhone giant’s stock. The climb helps continue Apple’s 2019 positivity, which means now might be a good time for investors to consider buying Apple stock on the dip while they still can.

Upgrade

Bank of America analyst Wamsi Mohan upgraded Apple stock from “neutral” to “buy” on Monday, citing pullback-based opportunities and more. The analyst also upped Apple’s 12-month price target from $180 a share to $210 per share. This marked a roughly 21% upside compared to Apple’s closing price on Friday of $172.91 a share.

Mohan said that Apple’s “growth across healthcare, wearables and increasing services penetration,” along with “stability of supply chain order cuts” will help it bounce back. “AAPL stock is down 26% from its peak (S&P down 9%) and up 9% YTD (inline with S&P 500 and below the [tech sector’s return] of 13%),” Mohan wrote in a note to clients.

“Our scenario analysis suggests that shares are discounting a “declining hardware” scenario (ex-cash, services), and the debate hinges on the L/T trajectory. In our opinion, weakness in hardware is not entirely structural. Our new PO of $210 is based on assumptions closer to scenario 2 (flat hardware, and somewhat slower than historical growth in Services).”

Overview

As we mentioned at the top, shares of Apple popped 3.46% during regular trading Monday to reach $178.90 a share. This represented a roughly 23% downturn from Apple’s 52-week high of $233.47 per share. Shares of Apple have clearly still outperformed its industry, but its recent downturn has seen its five-year returns slip far behind Microsoft’s MSFT 195% climb.

Much of Apple’s decline centered on the company’s Chinese and iPhone-related slowdown. Apple and many investors had known for years that the company needed to expand beyond the iPhone as the market became more saturated. Still, last quarter might have been Wall Street’s big wakeup call after iPhone revenues plummeted 15% to help overall sales fall 4.5%. Going forward, Apple faces difficult comparisons and the Chinese economic slowdown only makes the situation worse.

Luckily for investors, Apple is ready to roll out more offerings to try to offset the iPhone slowdown. Apple and Goldman Sachs GS are reportedly set to offer a credit card that pairs with an iPhone app that aims to help users manage their money. The move is part of Apple’s larger financial tech ambitions that include Apple Pay and could end up growing as Square SQ , PayPal PYPL , and others try to shake up the credit card and banking industry.

Meanwhile, Apple is set to introduce its streaming TV service in 2019. The company is said to have spent over $1 billion on original content in order to compete against Netflix NFLX , Amazon AMZN , Disney DIS , AT&T T , and others. Maybe more importantly, CEO Tim Cook is committed to expanding the company’s Apple Watch-style health offerings, which he thinks will play a valuable role down the road.

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 173.85.

The projected upper bound is: 189.51.

The projected lower bound is: 169.16.

The projected closing price is: 179.33.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 28 white candles and 22 black candles for a net of 6 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 56.3136. This is not an overbought or oversold reading. The last signal was a sell 20 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 66.62. 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 buy 44 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 189.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 7 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 5.990 at 178.900. Volume was 17% below average (neutral) and Bollinger Bands were 68% narrower than normal.

Open High Low Close Volume___
175.490 179.120 175.350 178.900 32,011,034

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 174.75 163.91 190.77
Volatility: 23 42 38
Volume: 24,779,794 32,114,576 32,777,518

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.

Summary

APPLE INC gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
APPLE INC is currently 6.2% below 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 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 30 periods.

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