Monday, May 10, 2010

Apple Still Strong!

AAPL


Overview
AAPL is up +7.69% for the week, down -2.72% for the month, up +20.53% for the year, and up an amazing +205.61% since the March 9, 2009 market bottom. This equates to +$18.13 for the week, -$7.10 for the month, +$43.26 for the year, and an incredible +$170.088 since the March 9, 2009 market bottom! Apple's market capitalization at $231B+ is now third largest in USA, behind Exxon and Microsoft. AAPL is approximately $23B below Microsoft's market cap of approximately $254B.

Apple Daily Chart
Below is the AAPL daily chart for 2010.

Noteworthy Closing Prices on Daily Chart below:
Current Close 253.99 (Highest yellow horizontal line)
2010 YTD & All Time High 4-23-10 270.83
YE 12-31-09 210.73
10 Month EMA 212.31 (Lowest yellow horizontal line)


AAPL: Indicators Are Bullish!



Intermediate-Term Trend
The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a buy/long/bull signal on Friday, March 12, 2009. Therefore, AAPL is now in an intermediate-term bull market and has remained so during the recent pullback and related Flash Crash. That is, the 25d sma is higher than the 50d sma.

Resistance
The current closing price, the highest yellow horizontal line is below the 2010 YTD and all time closing high and the run up to those highs in late April.  So the only resistance above is recent. AAPL filled part of the April 20 to 21 gap today, Monday, May 10.

Support
The most recent support is just below at the April 15 closing price of 248.92 and in that general time and price area.  There are multiple levels of support below this.

Moving Averages
Even during this recent pullback and Flash Crash, AAPL closed only on Friday, May 7 below the 50 day simple moving average.  AAPL is above the 25d, 50d, 100d, and 200d sma's, which are all ascending, as the continuing price strength pulls the sma's upwards and fan them out in a bull pattern.

Uptrend Line
The uptrend line, a rate of price ascent, is from the January 20, 2009 closing low of 78.20 up through the February 4, 2010 closing low of 192.05. The February 4 closing low has been the bottom for 2010.  AAPL spiked decisively above this uptrend line on February 25. AAPL has now stayed well above henceforth.

Downtrend Line
The downtrend line, a rate of price descent, is from the April 23, 2010 YTD and all time high of 270.83 down through the April 29, 2010 peak of 268.64. AAPL is below this downtrend line.

Relative Strength Index (RSI)
RSI 14 day = 54.52 is reasonable; well below the 90+ highs seen in mid April
RSI 28 day = 57.300 is reasonable; well below the 80+ highs seen in April
The RSIs are signalling plenty of upside room.

MACD (12,26,9)
The MACD has been bearish since May 4 as the pullback and Flash Crash pulled the related ema's down.

Long-Term Trend
The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. AAPL is well above this signal at the current close, the highest yellow horizontal line. Therefore, AAPL is in a long-term bull market and has been since April 2009.

Conclusion
Through the recent pullback and Flash Crash, the fundamentals at Apple Inc. never changed.  Apple Inc. is doing great!  Apple has been charging ahead with the introduction of the iPad, iPad 3G, a new iPhone OS 4, a new mobile advertising platform (iAd), a new iPhone 4G to be launched in June, overall strong iPhone sales and market share, and now reports of very strong iPad demand. The current price is low based on AAPL fundamentals.  The RSI 14 day and 28 day are reasonable.  The MACD flipped to bearish but should become bullish again soon.  The intermediate-term trend became bullish on Friday, March 12 and remains so. The long-term trend remains bullish.

Disclosure
I am long AAPL

Apple News


iPad
Over 1 million iPads have now been sold.  Apple has begun taking international preorders and will launch in 9 countries on May 28.  Apple launched the iPad, the Big Day, on Saturday, April 3.  Reviews of the iPad have been favorable overall. The App Store keeps adding iPad apps and the iBook store the same. Estimated 2010 sales of iPad range from 3 million units to 10 million units. It has been suggested that iPad sales might cut into iPhone sales some, but I don't believe this will have a material effect.

iPhone
The iPhone OS 4 was announced on Thursday, April 8 by CEO Steve Jobs . iPhone continues incredible sales and market share. The Q1 results for iPhone were outstanding and pump the profits into Apple Inc. Apple's share of global mobile Web browsing is at 67% from the iPhone and iPod Touch.

iAd
CEO Steve Jobs introduced the new personalized, mobile advertising system, iAd on April 8. This will compete directly, and replace, Google's advertising platform. I personally think this was a bigger announcement than the iPhone OS 4, that is, Apple is going inito the mobile advertising business. While iPad and iPhone sales will positively impact Q2 earnings, the iAd platform may well have a significant impact in future quarters as this revenue stream comes online.

Quarterly Earnings
Q1 earnings were released on April 20 and AAPL beat on revenues, EPS, and outlook.  Numerous analysts raised price targets to $300+ within 48 hours.  Q2 will include iPad sales and should be another stellar quarter.


AAPL

Seeking Alpha