Apple Inc. (NASDAQ:AAPL) — This major provider of computer hardware (iPhone smartphones, iPad tablets, Mac computers, etc.) appears to have an ever-evolving market for new consumer products. But, as noted in the June 22 Trade of the Day, many of the products are merely revisions of old designs — for example: A “thinner iPhone,” a “better Siri,” a “thinner MacBook.”
The “new iPhone 7” has no headphone jack? And who needs a 5.5-inch display, unveiled at the iPhone’s last refreshment in 2014. On Sept. 7, Apple responded with iPhone 7 and 7 Plus devices, and Apple Watch Series 2, which is more fitness focused and includes a GPS capability.
Standard & Poor’s reviewed the “new” products and concluded that the new camera/audio features, the doubling of memory content and an additional cost feature, AirPod, could provide additional revenues for the September quarter. They proved to be correct.
Apple’s fiscal-fourth-quarter earnings at $1.67 beat the Capital IQ consensus of $1.66, and even though iPhone sales declined, it too exceeded forecasts. They further forecast that fiscal year 2018 will have growth of 7.2% up from 5.8% in FY 17. Thus, S&P maintains its five-star strong buy and a price target of $130.
Following a double bottom in May (not shown) and June at about $90, Apple’s stock established a bull channel with a support line connecting the June, July, September and November lows.
It appears that the recent test of the line was successful when, after being penetrated on Nov. 4 on light volume, it jumped above it the next two trading days, each day closing in the upper half of its range for the day. Thus, assuming that Apple holds the bullish support line at $110, buy AAPL at $111 for a proposed trading target of $125 and a gain of over 12%.
