Apple Inc. (NASDAQ:AAPL) shares have nearly doubled since the end of fiscal 2015 and its forward price-earnings multiple has climbed
Stock buybacks have gotten a bad name in many precincts over the past few years, decried as unproductive “financial engineering” that detracts from corporate investment in growth.
But Apple’s aggressive use of its copious cash resources to repurchase its shares at modest valuations in recent years has shown the power of buybacks for a maturing company in a growth lull. And, for Apple, if not the typical company, long-term shareholders have benefited without compromising the company’s hiring or spending on capital investment.
The slowdown in iPhone unit sales in the past couple of years has restrained Apple’s overall growth since its fiscal year ended Sept. 30, 2015. In fact, net income this fiscal year is projected to be almost exactly equal to what Apple booked four years earlier.
In some ways, Apple is a unique company when it comes to this analysis. The enormous profitability of the first few iPhone iterations and the revival of the Mac franchise left the company with a towering cash surplus. And, make no mistake, there never was a smart, high-return way to deploy $200 billion all at once in capital investment or a major acquisition.
So steady buybacks, a goal to get its net cash to zero, regular dividend increases and continued development of new devices and services have been able to coexist at Apple in a way that most companies would envy.
And, of course, there’s no saying Apple shares at today’s level will prove as good a long-term bet as they’ve been, buybacks or not. The decline of the iPhone might steepen and other services might not be able to compensate, dollar for dollar.
But it’s hard to argue that the company’s capital-allocation strategy has been anything but a positive factor in supporting Apple shares as management works to navigate a transition toward a future less reliant on the hottest new smartphone.
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 196.91.
The projected upper bound is: 220.98.
The projected lower bound is: 206.30.
The projected closing price is: 213.64.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 27 white candles and 23 black candles for a net of 4 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 8 rising windows in the last 50 candles–this makes the current rising window even more bullish.
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 50.3562. This is not an overbought or oversold reading. The last signal was a sell 3 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 67.64. 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 40 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 224.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. 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 6 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed up 4.260 at 213.040. Volume was 160% above average (trending) and Bollinger Bands were 45% narrower than normal.
Open High Low Close Volume___
216.420 221.370 211.300 213.040 69,281,360
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 207.92 196.22 186.68
Volatility: 22 24 39
Volume: 25,155,508 24,244,500 32,710,112
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 gapped up today (bullish) on heavy volume. Possibility of a Breakaway Gap which usually signifies the beginning of a major market move. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
APPLE INC is currently 14.1% 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 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 33 periods.
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