Apple Inc. (AAPL) Stock Is Shrugging Off the Trump Slump

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apple stock - Apple Inc. (AAPL) Stock Is Shrugging Off the Trump Slump

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U.S. equities are continuing their post-Trump rally, with the Dow Jones Industrial Average now closing in on the 19,000 level. What has changed, however, is participation to the upside by many big-tech stocks that initially weakened in the wake of the Election Day surprise. These include Apple Inc. (NASDAQ:AAPL) — arguably the single most important stock in the market.

Apple stock pushed to monthly highs on Monday, retaking its 20-day moving average for the first time since falling from its October high near $117.50. The 50-day MA, which held the six-month uptrend that was broken last month, looms just ahead.

Stepping back a little, the weekly chart reveals that AAPL stock remains in a medium-term uptrend. The 20-week average continues to rise and remains above the 50-week average.

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The pattern of higher highs and higher lows in Apple stock over the past five months stands in contrast to the persistent downtrend the stock suffered between 2014 and 2015. That’s when investor sentiment soured in the wake of disappointing quarterly results, tepid sales out of China and evidence the smartphone market was saturated as demand for iPhones waned and Apple’s innovation cycle slowed.

Reason for Positivity in Apple Stock?

While these concerns linger, especially in the wake of the underwhelming iPhone 7, many are looking ahead to positives on the horizon.

Analysts at Canaccord Genuity notes that AAPL captured 106% of smartphone industry profits in Q3 thanks to Samsung’s bugled Note 7 recall. With the iPhone installed base expected to exceed 570 million units this year, they believe replacement sales and earnings should be strong going forward — especially with the 10-year anniversary iPhone 8 coming in 2017.

Overall, they are looking for the company to return to growth next quarter and maintain a $140 price target on Apple stock.

I’m looking for a move to test prior highs near $117.50. Right now, I don’t feel strong enough about AAPL to play it with calls. But it might be worth nibbling on for a long-term position since the medium-term trend is higher.

The company will next report results on Jan. 24 after the close. Analysts are looking for earnings of $3.23 per share on revenues of $77.1 billion.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2016/11/apple-inc-aapl-stock-trump-slump/.

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