Apple Inc. (NASDAQ:AAPL) Rises 68%, Pulling Dow to All-Time High
Apple Inc. (NASDAQ AAPL) shares have risen by 68.48% to $265.76 in 2019. This outpaces any stock in the Dow Jones industrial average by far. The Dow hit record territory Friday, up 20.05% to 28,004.89. Without such a huge rally in Apple’s shares, the Dow could not have breached 28,000.
The company’s latest earnings statement blew skeptics away. Apple recently posted earnings of $3.05 per share, up from $2.94 last year. Forecasts for the upcoming holiday quarter were strong. The iPhone 11 was only available for part of last quarter, so its sales results should improve in the current one.
Apple’s stock increase rode the back of two developments for most of the year. The new iPhone 11 has done better than expected, although the numbers are speculation by experts and not data provided by Apple. The other is that Apple’s bet on “services” as an alternative to rising hardware sales has gotten a boost from the belief of some investors in particular that its Apple TV+ streaming product will do well. Apple’s services business results crushed expectations for the latest quarter. Its revenue set a record at $12.5 billion, against total company revenue of $63 billion. Services as a percentage of total revenue is expected to continue to rise.
The release of the iPhone 11 in September was indeed the tonic the stock needed. It had sold down sharply in mid-summer after Apple announced its earnings for a quarter ago. The mainstay of revenue had continued to weaken as the iPhone X series did poorly, particularly in the world’s largest wireless market, China. The trade war between China and the United States also dragged on the stock, as anxiety about Apple supply chain interruptions grew. Apple sources many parts of the iPhone from companies in China. iPhone 11 sales were enough to alleviate any worry along these lines.
Apple’s management continues to make the case that its services business would replace the iPhone as the company’s growth engine. It was not an easy argument to make, up until the new figures came out.
The launch of Apple TV+ is critical to the new strategy. Apple already has a huge music store. Its app store is by far the largest in the industry. By some estimates, apps downloaded since the store began total more than 130 billion. Many experts believe that app sales cannot continue to grow at rates they have over the past decade. So video streaming becomes an essential part of the growth in this multimedia business.
All this means that Apple’s bet on TV is absolutely critical. At $4.99 for the first month, after a seven-day free trial, the service is aggressively priced compared to industry leaders Amazon and Netflix, which have price points of $12.99 a month. Apple’s management has gambled that, although its library of content is limited compared to the leaders, the low price, the Apple brand and the hundreds of millions of iPhones, iPads and Macs in the world are a huge base to which it can market its streaming service. A JPMorgan analyst recently said Apple TV+ and Apple’s ad business would add $25 billion in revenue in 2025.
Confidence has grown that Apple’s new iPhone 11 and services strategy is the right formula. Its market cap is back above a trillion to nearly $1.2 trillion. And it was recently named the most valuable brand in the world again.
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 244.32.
The projected upper bound is: 272.34.
The projected lower bound is: 255.62.
The projected closing price is: 263.98.
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 30 white candles and 19 black candles for a net of 11 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 67.4430. This is not an overbought or oversold reading. The last signal was a sell 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 69.00. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 47. 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 1 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed down -3.100 at 263.190. Volume was 2% below average (neutral) and Bollinger Bands were 45% wider than normal.
Open High Low Close Volume___
265.540 266.083 260.400 263.190 26,609,920
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 263.32 238.73 205.80
Volatility: 14 23 29
Volume: 22,429,748 26,218,698 27,050,904
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 27.9% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 65 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.