Sunday, September 5, 2010

Apple Rallies Above 50 & 100 Day Moving Averages (Charts) AAPL

AAPL


Steve Jobs, Apple CEO, announced new iPods, iTunes, iOS, TV on September 1, 2010
Apple market capitalization is 2nd highest in USA at $236.40B, behind only #1 Exxon at $312.23B
Last 12 month sales were $42.91B


Apple Overview

Apple rallied with the stock markets this past week and regained the 50 day and 100 day simple moving averages. However, the 50d sma did cross below the 100d sma on August 31 - a Death Cross. AAPL is up +7.10% for the week, up +6.45% for the month, up +22.80% for the year, and up an amazing +211.36% since the March 9, 2009 market bottom. This equates to +$17.15 for the week, +$15.67 for the month, +$48.04 for the year, and an incredible +$175.66 since the March 9, 2009 market bottom! AAPL at the September 3 close of $258.77 is -5.58% and -$15.30 from the all-time closing high of $274.07 on June 25.

By comparison, the overall market, the S&P 500, is up 3.75% for the week, up +5.26% for the month, down -0.95% for the year, up +63.26% since the March 9, 2009 market bottom, and down -9.26% from the 2010 YTD high on April 23. AAPL is outperforming the overall market long-term since the March 9, 2009 market bottom, outperforming the market for 2010, and outperforming the market short-term. A review of the S&P 500 (S&P 500 Rallies Above 50 Day Moving Average) is here.

Apple News and Fundamentals Apple was again in the news this past week with the Special Event on September 1. At this event, CEO Steve Jobs launched new iPods, iTunes, iOS, and Apple TV. A summary and review of these announcements is posted here (Steve Jobs Unveils New iPods, iOS, iTunes, TV) and here (Apple Announces New iPods, iTunes, iOS, TV).  AAPL is currently trading at 19.49 PE (ttm) and  the EPS is 13.29.

Economic and Market News A review and chart of the USA quarterly GDP as reported by the BEA (USA Q2 GDP Revised Downward to 1.6%) is here, which shows a downward trend. A review and chart of the ECRI Weekly Leading Index (USA Weekly Leading Index Dips To 6-Week Low "No re-acceleration of growth on the horizon") which shows bottom bouncing is here. A review and chart of The Conference Board monthly Leading Economic Index (USA Monthly Leading Economic Index: Double Dip Recession or Bottom Bouncing?) is here. Whether the USA GDP, WLI, and LEI have bottomed, will begin recovery, or continue downwards represents the "unusually uncertain" economic outlook that FRB Chairman Bernanke was talking about (Fed Chair Bernanke: Moderate Recovery, Outlook "Unusually Uncertain") and is reviewed here. The IMF issued a partial update of their semi-annual World Economic Outlook as of June 30 (IMF Update: Global Recovery Continues) which is reviewed here. In summary, the IMF sees the world economic recovery continuing. However, it does appear a second half 2010 slowdown is in progress for the world and the USA.


Apple Rallies Above 50 and 100 Day Moving Averages

AAPL Daily Chart Below is the AAPL daily chart since early April 2010. A monthly chart is included at the bottom of this page for a broader perspective.

Noteworthy Closing Prices on Daily Chart Below
Current Close $258.77
2010 YTD & All Time High 6-18-10 $274.07
2010 YTD Low 2-4-10 $192.05
YE 12-31-09 $210.73
10 Month EMA $234.95

Trading Range As noted with the S&P 500 (S&P 500 Rallies Above 50 Day Moving Average) being in a trading range  here, AAPL broke down to begin a trading range as late as June 29. This was after setting 2010 YTD and all-time highs the week before. The highest closing price subsequently has been 264.08 on July 27 (the highest yellow horizontal line on the daily chart below). The lowest closing price since has been 239.93 on August 24 (the lowest yellow horizontal line on the daily chart below). Based on these parameters, the AAPL is now reaching the higher end of the trading range at 258.77. Tremendous support was shown August 24-26 before AAPL, and the market, rallied above. This price area could be argued as the "new bottom" of the trading range - closing lows of 240.28 and 239.93 on August 26 and 24.


Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a sell signal on July 30. That is, the 50d sma is greater than the 25d sma. Previously, a buy signal had been in effect since June 23.

Resistance Because AAPL is below the YTD and all-time high, there are multiples levels of resistance above. The recent daily closing highs of 261.75, 262.09 262.98, 263.95, and 264.08 on August 9, May 9, August 4, June 2, and July 27, respectively, are noteworthy resistance. Surpassing these two prices clearly places AAPL up near the lofty all-time highs. Then the key resistance and benchmark prices above are the earlier 2010 YTD and all-time high on April 23 of 270.83 and the new all-time high on June 18 of 274.07.

Support Because AAPL is above the YTD lows, there are multiple levels of support below. The 100 day simple moving average (255.26) and the 50d sma (253.74) were regained on September 3 and now are important support. The recent closing lows of 240.28 and 239.93 on August 26 and 24 are ultimately key support as the current rally is from those price points. The July 2 and 19 closing lows of 246.94 and 245.58 are also important recent support.

Moving Averages AAPL is now above all the daily simple moving averages on the chart: the 25, 50, 100, and 200. The 25d sma has stopped descending and  is leveling off, but is below the 50d and 100d. The 50d sma is descending and crossed below  the 100d sma on August 31 - a Death Cross. The 50d sma continues above the 25d and 200d sma's. The 100d sma is slightly ascending and is above the 25d, 50d, and 200d sma's. The 200d sma continues  to ascend.

Uptrend Line The yellow 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 dropped below this trendline on August 23 and just regained it on September 3.

Downtrend Line The yellow downtrend line, a rate of price descent, has been created by the pullback from the June 18 all-time high. This downtrend line is from the June 18 all-time closing high of 274.07 down through the June 22 sub-peak of 273.85. AAPL has stayed below since.

Relative Strength Index (RSI) The RSI 14 day = 63.05 is reasonable and well above the 2010 YTD low of 21.49 on August 24. The RSI 28 day = 46.55 is slightly leaning oversold and is above the 2010 YTD low of 38.25 on August 31. The RSIs have plenty of upside room.

MACD (12,26,9) The MACD flipped to bullish on September 2 after being bearish since August 11. The MACD has been up trending since August 26. The 2010 peak was +2.49 on March 10 and 2010 low was -3.55 on May 7. Previously the highest was on November 4, 2008 at +3.41.

Volume AAPL traded 18.6M shares on Friday, September 3. The 20 day moving average is approximately 16.5M and level. Volume began decreasing for AAPL on July 22, when the 20 day moving average was was approximately 29M! This recent rally has not generated a spike in volume, except on September 1 which was when CEO Steve Jobs introduced new products at the Special Event.

Long-Term Trend The 10 month exponential moving average of 234.95 is a long-term trend indicator and shown on the monthly chart below. 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. AAPL is in a long-term bull market and has been since April 2009.

Conclusion Uncertainty over the continuation of the USA economic recovery and previously the Euro Crisis have caused the markets to break the bull market trend that began in March 2009 and peaked in April 2010. This has affected AAPL plus the iPhone 4 antenna issue created additional uncertainty. Regardless, the fundamentals at Apple Inc. have been great. Apple has been charging ahead in 2010 with the introduction of the iPad, iPad 3G, a iPhone 4, iOS 4, and a new mobile advertising platform (iAd), a new line of iPods, iTunes, and even Apple TV. "Apple is beginning the strongest product cycle in the company's history, led by the iPad and iPhone 4", stated Deutsch Bank on June 22. The current price has not caught up with AAPL fundamentals. The intermediate-term price trend continues bearish, but the the long-term price trend remains bullish.


AAPL Monthly Chart

Below is the monthly AAPL chart since January 2005. The overall analysis and commentary is the same as for the daily chart above. The higher and lower yellow horizontal lines are the current trading range discussed above. The the current price and the yellow uptrend line are the same, and as described, on the daily chart above. The white moving average line is the 10 month exponential moving average, which is the long-term bull or bear market signal, as discussed above with the daily chart.



Disclosure
We are long AAPL


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Steve Jobs Unveils New iPods, iOS, iTunes, TV (Video) Apple Digest
Apple Announces New iPods, iTunes, iOS, TV (Video) Apple Digest


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