In a fantastic technical move, AAPL shares break beyond our $137 goal.
Apple is currently aiming for new all-time highs above $145.
The majority of indicators continue to be optimistic.
Apple keeps on delivering as long as investors believe in the mega-tech company. Finally, in June, the stock awoke from its dormancy and has risen steadily since bottoming out in the low $120s. For committed investors and new traders who saw the potential for the major tech company to bounce from lows, a return of 13% in the last month isn’t bad. Fortunately, we had predicted this move, so those of you who jumped on board are still alive and well.
The post-results fall bottomed out in mid-May, coinciding with a general rebound for Nasdaq stocks. The Fed had effectively fought off inflation fears, and the tech bears went back to sleep. From a previous consolidation zone in the low $120’s in February and March, Apple shares found significant support. The 200-day moving average was also in this zone, making it a good staging position for halting the drop and planning a move higher.
On April 28, Apple released its first-quarter results, kicking off the latest slide. These earnings exceeded Wall Street analysts’ expectations by more than 40%, and the company added to the package by announcing an increase in its dividend and share buyback program. Despite this, AAPL stock fell continuously after the report, with the exception of an intraday jump to $137.07, which we had mentioned as a resistance objective. Apple’s unfavorable reaction to the excellent news caused the stock to drop more than 10% before settling in the low $120s.
Friday, however, saw a strong advance above the $137.07 resistance we mentioned, bringing AAPL shares into an area of low volume and thus low resistance. This should make a push for new highs above $145 a little easier. The average Wall Street target of $159, as seen in the table below, is also in reach.
Apple’s main figures
Price/Earnings (P/E) 31 Market Cap $2.33 trillion Enterprise Value $2.1 trillion
Price/Book
Price/Sales 35 8.7% Gross Margin 40%
23.4 percent net margin
EBITDA
100 billion dollars
Buy $159, according to Wall Street’s average rating and price target.
The break of $137.07, the high immediately after the latest results were released, is clearly visible. We’ve finally recouped all of our losses. The emove is being guided higher by the 9-day moving average, and the all-time high of $145.08 is not far away. So, for the time being, $137 serves as short-term support for the bullish trend, and a break of this and the 9-day moving average right below would be cause for concern. The Relative Strength Index (RSI) has reached overbought area, but that does not rule out a price drop. The RSI is a lagging indicator that measures relative movement speed. If the price rises slowly or there is a period of consolidation, the RSI can return to neutral without the price of Apple stock decreasing. But it’s still worth keeping an eye on.
The risk-reward ratio, on the other hand, remains tilted in favor of more gains. Here are the three reasons you’ve been waiting for.
1. The trend is your ally, and this one is particularly strong. Further gains are likely as long as Apple holds above $137 and the 9-day moving average.
2. The volume profile on the chart’s right side has thinned out. As a result, price movements are more easily accelerated here. Up here, resistance isn’t as intense. We can also see how the area below $135 acts as a strong volume support.
3. The stock market remains positive in general, and seasonality is on our side. The Nasdaq’s most profitable time is traditionally the first two weeks of July.
If you want a bonus extra incentive, Apple’s giant tech peer group is also setting new highs, so Apple needs to keep up. GOOGL soared to new highs on Friday, while Facebook (FB) and Amazon (AMZN) are barely below their own highs.
Okay, good luck with your trade and, as always, use caution while managing your risk./n
