- Apple shares stage strong turnaround on Monday.
- AAPL stock hits new all-time high above $150.
- Apple stock breaks out of wedge formation.
Apple stock broke out properly on Monday, putting in a strong intraday turnaround. A strong opening to the regular session on Monday saw Apple trade up to new highs before swiftly turning around as the broad market started to look ugly. Most equity indices were in the red, but despite some concerns over increasing Delta lockdown globally, equity markets regrouped at halftime and soared after lunch. Apple stock closed at a new all-time high of $151.12 in the process and making for a strong breakout of the wedge formation.
We had actually been bearish on the stock but had at least recommended an options strangle strategy, which is working out well for those who took the advice. Options strangles are a strategy designed for breakouts but used for when you are not sure if the stock is going to break higher or lower. Strangles involve buying an out of the money call and an out of the money put. Our call from Thursday last week: "A $135 put for August 27 costs about $0.30 cents per share. If Apple breaks $141.67, it should move pretty quickly toward $133.80. If you are bullish and see a breakout to new highs, then a $155 call for August 27 costs $0.19 cents per share."
Checking in to see how this strategy is working out, our $135 put has dropped in value from $0.30 to $0.15. Not great, but then Apple has popped. Our $155 call, however, has exploded in value to $0.97. Our strategy cost $0.49 a share and is now trading at $1.12, which is up 128% since last Thursday. Even though we got the bearish call wrong, we still managed to bank some strong profits based on a breakout strategy. Hopefully you banked, as we just gave the advice. We did not actually trade it. Doh!
-637647847396548387.png)
Apple key statistics
| Market Cap | $2.5 trillion |
| Enterprise Value | $2.3 trillion |
| Price/Earnings (P/E) | 29 |
|
Price/Book |
38 |
| Price/Sales | 9 |
| Gross Margin | 41% |
| Net Margin | 25% |
| EBITDA | $112 billion |
| 52 week low | $103.10 |
| 52 week high | $151.19 |
| Average Wall Street rating and price target |
Buy $165 |
Apple stock forecast
Monday's move was a strong one and eliminated any bears from the picture. The breakout of the wedge confirms it as a bullish continuation pattern, and the double top we had identified never triggered. To recap, a double top needs to break the valley low from the first high to trigger. This was $141.67. Instead, Apple has pushed through and made new all-time highs. Support now comes in at $150, the old all-time high and a nice psychological round number. The top of the wedge formation is also support. This is at $149 and is where the 9-day moving average will sit today. Any retracement would need to hold the latter $149 level to maintain the bullish trend in place. Given that the stock is at all-time highs, there is not much in the way of resistance.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.