Apple Inc. (NASDAQ:AAPL) paid investors $363 billion to continue holding the stock
Apple shares have outperformed the stock market this year, riding up 27% year-to-date vs. 15% for the S&P 500 index*.
That is counterintuitive because, frankly, Apple is struggling.
- iPhone sales declined -17% year-on-year in the last quarter, despite the introduction of new, higher-priced models.
- iPhone sales declined -16% the quarter before that.
- The fabled “installed base” of 900 million iPhone users, which analysts once thought would form a “super-cycle” of hundreds of millions of users upgrading into new iPhones every year, has been MIA for 6 months.
- Apple stopped reporting device unit sales in favour of dollar volume – not a good sign.
- iPhone sales were boosted by price discounting in China. “We made some price adjustments, essentially backing out the weaker currency effect and then some,” CEO Tim Cook told analysts.
- It is not clear that Apple has an amazing new device to launch anytime soon.
The new narrative from Cook is to ask investors to look at growth in Services, composed of software sales, app downloads and iTunes. The theory is that if Apple can persuade each iPhone user to download more apps or buy more music, then growth can come from Services even if the iPhone is in decline.
However, Services may not be big enough to offset declines in iPhone revenues. In the last quarter, iPhone sales declined by $6.5 billion. Services increased by only $1.6 billion. Yes, the percentage growth of Services was 16%, but that increase was coming off a smaller base than the iPhone (obviously) and not increasing as fast on a percentage basis as the iPhone declined.
It’s not clear whether Services growth will ever be enough
One quarter isn’t the whole story of course. This next chart shows the long term. Although Services has grown robustly, and has stayed up while the iPhone has collapsed, it is nonetheless ambiguous as to whether Services growth is increasing or in decline. Even in a steady state, it could be a very long time before Services grows into a business on a par with iPhone.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 205.84.
The projected lower bound is: 189.48.
The projected closing price is: 197.66.
A black body occurred (because prices closed lower 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 27 white candles and 23 black candles for a net of 4 white candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 24.4805. This is not an overbought or oversold reading. The last signal was a buy 0 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 44.04. 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 4 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 -176.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 10 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed down -3.540 at 197.180. Volume was 100% below average (consolidating) and Bollinger Bands were 25% narrower than normal.
Open High Low Close Volume___
197.419 198.850 192.770 197.180 11,203
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 204.88 194.07 192.53
Volatility: 39 27 39
Volume: 31,892,178 28,145,628 34,287,640
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 2.4% above its 200-period moving average and is in an downward 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 bearish on AAPL.O and have had this outlook for the last 0 periods.
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