Apple Inc. (NASDAQ:AAPL) time to take a bite out of Apple

Apple Inc. (NASDAQ:AAPL) time to take a bite out of Apple

Apple Inc. (NASDAQ:AAPL) time to take a bite out of Apple

Shares of Apple (NASDAQ: AAPL ) have certainly fallen hard along with the rest of the market over the past few weeks. Apple stock is now down nearly 10% from the recent highs despite good earnings and a better outlook from the recent earnings report. While growth is undoubtedly slowing, AAPL is now nearing levels that make it comparatively attractive on both a fundamental and yield basis. Time to take a bite out of Apple.

Apple reported earnings on July 30 and beat expectations on both the top and bottom line. Earnings came in at $2.18 per share, well above the consensus for $2.10 per share. Revenue also was a beat at $53.8 billion versus expectations for $53.4 billion. Most importantly, Apple raised guidance to a range of $61 to $64 billion. Previously the company guided to just $60.98 billion.

As expected, the initial reaction was positive with AAPL stock trading past $220 following the release. Since then, however, Apple stock has given back all those gains and more. AAPL stock now sits at $200, a big pullback from those $220 highs of only 8 trading days ago.  This despite the solid earnings beat and raised guidance. To me, the combination of better earnings and a cheaper stock price makes AAPL a much more attractive buy than it was just a month ago.

Apple stock now sports a forward price-to-earnings multiple of 15.6, well below the forward multiple of 18.2 for the S&P 500 . The dividend yield of 1.5% is not that far below the 1.64% yield on the 10 year Treasuries. Lower multiple stocks with a decent dividend are a good place to hunker down during these periods of market turmoil.

The technicals also point to a potential pop on the horizon for Apple stock. The MACD reached recent lows before turning higher. The five-day RSI got to oversold levels with a reading below 30 before strengthening. Bollinger Percent B also printed negative before getting back to positive territory. Prior instances when these metrics were this oversold marked significant short-term lows in Apple stock.

AAPL also held the crucial 100-day moving average at $197.29. AAPL stock still remains above the uptrend line from the lows of last December.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 211.78.

The projected lower bound is: 192.47.

The projected closing price is: 202.12.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

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 48.1716. This is not an overbought or oversold reading. The last signal was a buy 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 48.64. 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 51 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 -24. This is not a topping or bottoming area. The last signal was a buy 5 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 9 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed down -1.010 at 201.740. Volume was 0% above average (neutral) and Bollinger Bands were 14% narrower than normal.

Open     High      Low     Close     Volume___
203.460 205.140 199.670 201.740 27,883,364
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 201.18 201.18 185.72
Volatility: 50 31 40
Volume: 34,852,600 25,811,648 32,850,544

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 is currently 8.6% 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 9 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH