Apple (AAPL) Stock Price and Forecast: Is the new iPhone 13 a reason to buy?


  • Apple stock barely registers any change on Friday.
  • AAPL closes at $146.92 for a tiny gain.
  • Stocks are struggling for upside momentum from the latest dip.

Apple barely changed on Friday as stock markets search for direction after a tumultuous week with plenty of uncertainty. Monday kicked off with some sharp losses, and they were sustained on Tuesday as investors worried over the twin threats of the Fed taper and Evergrande contagion. A recovery soon played out, thanks largely in part to the Fed not putting a timeline on its bond tapering program. This allowed some element of risk-on to permeate through the stock markets globally, and "buying the dip" was once again the rallying call.

As we have pointed out, it would appear something has changed this time around. This dip is the first one this year that has been deeper than the preceding dip. This to us marks a trend change. Irrespective of the fundamental narrative, classical chart analysis dictates that a lower low and a lower high is a classic downtrend. This is what the leading indices have produced with this latest dip. 

Apple has been in a downtrend since breaking $144.50 on Monday as this created a lower low. It just held onto the next support at $141.67 for now. The stock actually opened lower on Friday but did steadily gain throughout the session to close near the high of the day at $146.92, basically flat on the day.

Apple key statistics

Market Cap $2.4 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 $157.26
Average Wall Street rating and price target

Buy $166.7

 

Apple stock news

The key point and only area of focus this week is likely to be the new iPhone 13, which launched on Friday. This is the key driver of Apple revenue and early data will be closely watched. Wedbush analyst Dan Ives was on CNBC on Friday, saying that it appears early demand numbers from Asia show iPhone 13 demand is up 12% to 13%. Preorder data is even stronger, according to Ives, up 20-30%. If accurate, these are huge numbers for Apple stock and will drive revenue beats going forward. The main reason for the hoped-for super cycle in iPhone 13 orders is the huge discounts being offered by mobile phone network providers making an upgrade from an iPhone 12 costless in some cases. Mobile phone network operators have invested huge money into 5G networks and need customers to repay that investment. The easiest way to get customers is to offer cheap iPhones, simple as that. 

Apple stock forecast

From reading above then it would appear the news flow is positive and everything is rosy in the Apple garden, but that is not the case. Yes, the stock is near all-time highs, but it has set a series of lower highs and lower lows, signaling a classic downtrend. 

The daily chart above clearly shows the downtrend channel. Also interesting is the divergence between the recovery from Wednesday on and the flatlining Price Volume Trend (PVT) indicator. This indicator is similar to On Balance Volume (OBV) and is a momentum oscillator. If the price is above the previous close, volume is added to the PVT and if below then it is subtracted. Generally, it will follow the price action, but divergences can be powerful.

FXStreet View: Neutral, bearish below $144.50, bullish above $150.

 

 

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