AAPL STILL HOLDING UP ABOVE SUPPORT WHILE THE MARKET RATTLES AROUND - CAN THAT CONTINUE?

Apple, Inc. AAPL stock seems to be in the midst of a routine pullback in an overall bull market for the stock. Technicians draw the line of demarcation between “bullish” and “bearish” for the price chart at $95.45 – above it AAPL is bullish, below it AAPL is short-term bearish. With the big iPhone release behind them and bugs and product issues in front of them, how much short-term weakness will shareholders have to tolerate? Let's take a look at the bulls' and bears' arguments…. What the bulls see in Apple… • Relatively cheap valuation metrics: o A PE of just under 14 while revenue and earnings growth for 2015 is expected to come in at 11.7% and 14.2% respectively o An enterprise value that narrowly eclipses the market capitalization - $596.39 billion vs. $593.88 billion. o A price-to-sales of only 3.39 • Impressive net profit margins of over 21% • A nearly perfect balance sheet: o Cash of $37.93 billion versus total debt of $31.04 billion o A current ratio of 1.47 o A total debt-to-equity ratio of 25.67% • Huge positive levered free cash flows of over $37 billion annually • A price chart that is technically bullish with strong relative performance recently and plenty of layers of support – including the long-term uptrend line at around $86 What the bears see in Apple… • A pricey price-to-book of 4.99 • Plenty of downside to the uptrend line – but only if “correction support” at $95.45 fails Technically speaking on AAPL… Technicians note that Apple stock appears to be in the midst of the “c” leg of an “abc” correction to the downside with a projected target of $95.45. The overall technical picture for Apple appears to them to be very positive, however. They note that as long as the “correction support” at $95.45 holds up, the next sizable move for Apple should be to the upside with targets in the $105 - $111.50 range. If that support fails, however, a move down to the uptrend line at around $86 should follow. Overall... Apple looks like a good “buy the dip” candidate as long as the $95.45 level holds up as support. Any break and close below that will not only spell more trouble for AAPL, but very likely for the broader market as well.