Market Overview

Apple: The Technical And Fundamental View For The Short Term

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Shares of Apple Inc. (NASDAQ: AAPL) have been in a tight trading range since past three months. Ari Wald of Oppenheimer and Erin Gibbs of S&P Capital IQ, were on CNBC Wednesday to share their technical and fundamental view on the stock respectively.

Fundamental View

“Apple has tended to trade between about 13.2 to about 15.5 times forward earnings for the past year,” Gibbs said. “It’s been in that fairly tight range. Right now it’s at about 14 times. So, if it could go above 15 times again towards that top of the range, we're looking at a price of about $140 or 8 percent over where it's trading today.”

Technical View

“We would be buyers of this stock, specifically on pullbacks,” Wald said. “I think this tight trading range […] is really just healthy consolidation. The stock had run up a lot and it’s just moving sideways working off some of those overbought conditions. We think the next significant move is higher."

He continued, “The level we are watching is $145 and that was the target reached on the breakout above $100, way back in the fourth quarter of last year, where we came out of this massive range for Apple, this $45 range between $100 and $55 and we think that you can get that $45 on the upside now, following the breakout above $100. Of course that would measure to $145 -- we're not there yet.”

“Some of our work suggests we could still move sideways maybe for another month, get that breakout in June. But I think this stock becomes very attractive on pullbacks. I think $120-$125 support holds. I think that’s your floor, very attractive on the dips Apple’s going up in charts, too,” Wald said.

 

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