Monday, 23 September 2013

AAPL - outperforming the main market

Whilst the main indexes closed moderately lower for a third day, Apple (AAPL) saw very significant gains of $23 (4.9%) into the $490s. Near term momentum is turning back to the bulls, and a daily close in the $500s looks very viable for Tue/Wednesday.

AAPL, daily


AAPL was higher by $30 in Monday pre-market to $498, but with the main indexes weak, the opening gains failed to a significant extent in the early morning. Yet..the afternoon action was one of a recovery, and the closing gain of almost 5% is something to be taken seriously.

From a MACD (blue bar histogram) cycle, AAPL is set to go positive cycle - along with a bullish cross, no later than Wednesday. A daily close in the $500s looks very viable for the Tues/Wednesday close.

If the main market can battle higher - into the sp'1730s, later this week, AAPL will very likely be trading in the 520s.

Bigger picture - a 2013 close in the $600s ?

AAPL, monthly, 7yr

Perhaps far more interesting to consider is the outlook for AAPL. If the main market can climb broadly into year end - sp'1850/1950, then AAPL should (in theory) be back in the 600s. Yes, there are serious issues with very strong competition (not least Samsung), but APPL still has a massive worldwide fan base, and that simply won't disappear overnight.

Naturally, a fair few doomer bears will roll their eyes at the notion of a year end upside target in the $600s, but relative to the main market, AAPL is seriously under-valued.

see key stats @ yahoo! finance.  A forward PE of around 11.5 is 'reasonable' on any basis.

As ever, AAPL is one to watch!