Can Apple Inc. (NASDAQ:AAPL) Stock Have Another Strong Quarter?
Apple (NASDAQ:AAPL) stock rose over 2.3% on Thursday, the first trading day of the decade, hitting a new 52-week high intraday at $300.60. However, as I write this article, Friday is proving to be another story for AAPL stock as well as the broader markets. Headlines on political developments and fresh tensions in the Middle East are likely to dominate the short-term mood in the markets.
In 2019, Apple stock delivered its best performance in a decade, rising over 86%. Now investors are wondering if the share price could soon reach $350. Although I firmly believe that Apple stock will continue to perform well in the long-term, on a short-term basis, it may be a good idea to take some paper profits you may have in Apple stock.
Similarly, I would urge investors to not commit all their intended capital to AAPL stock in the coming days yet, especially before the release of quarterly earnings expected in late January. Any upcoming sell-off are likely to offer a dip-buying opportunity in Apple shares.
Can Apple Stock Have Another Strong Quarter?
When AAPL reports Q1 earnings in several weeks, investors will be looking closely at the company’s fundamental numbers, including total revenue and iPhone revenue, which accounts for over half of its total revenue.
In October, the tech giant posted Q4 revenue of $64 billion, an increase of 2% YoY, and quarterly earnings per diluted share of $3.03, up 4%.
Wall Street will also analyze the revenue from Apple’s Services, which has grown over 50% in two years, making it the second-largest business behind the iPhone.
The owners of Apple stock who remain committed to AAPL realize the importance of its Services business, which includes the App Store, Apple Pay, iTunes, AppleCare and Apple Music, to the company’s bottom line in both the near-term and the longer term.
These value-added services help consumers get more benefit and enjoyment from their Apple products. AAPL has been working hard to convince more of its customers to sign up for its various services. That trend should continue. Driving more revenue and profit from Services will provide the next growth catalyst, enabling Apple stock to rise.
In its Q4 result, Apple’s guidance for the first quarter of fiscal 2020 included expected revenue of $85.5-$89.5 billion and gross margin between 37.5% and 38.5%.
When you add the fact that the group has a clean, strong balance sheet and generates about $60 billion per year in free cash flow, it is quite easy to see why many investors love AAPL stock.
The recent strength in the Apple stock price indicates that investors are expecting a robust holiday quarter from Apple, including high sales numbers from wearables. Therefore, if iPhone or Services revenue comes in below expectations, Apple stock could easily be pushed downwards.
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 270.88.
The projected upper bound is: 307.15.
The projected lower bound is: 290.01.
The projected closing price is: 298.58.
A white body occurred (because prices closed higher 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 34 white candles and 16 black candles for a net of 18 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is 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 91.1647. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 77.70. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 25 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 133.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 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 13 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed down -2.920 at 297.430. Volume was 39% above average (neutral) and Bollinger Bands were 67% wider than normal.
Open High Low Close Volume___
297.150 300.580 296.500 297.430 36,633,880
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 289.04 267.46 220.29
Volatility: 19 21 29
Volume: 32,223,722 26,006,632 27,339,730
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 35.0% above 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 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 94 periods. Our momentum oscillator is currently indicating that AAPL.O is currently in an overbought condition.
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