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Will Apple Shares Continue Their Run After Huge August Rally?

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Will Apple Shares Continue Their Run After Huge August Rally?

Up more than 16 percent since the start of August alone, Apple Inc. (NASDAQ: AAPL) is on track to record its best trading month since 2012. But can the ongoing momentum continue? Two experts debate weigh in on CNBC.

The Pros

Matt Maley, an equity strategist at Miller Tabak, and Chad Morganlander, portfolio manager at Washington Crossing Advisors, talked Apple in a recent CNBC "Trading Nation" segment.

Maley: Don't Fight The Stock

Apple added around $140 billion in value in August alone, which is more than the entire market cap of fellow Dow Jones components Nike Inc (NYSE: NKE) and IBM Common Stock (NYSE: IBM), said Miller Tabak's Maley.

This makes it hard to "fight the stock" at current levels, although it is reasonable to now be "not quite as bullish" on the stock, as it appears poised to take a "breather," he said. 

Apple is the second-best Dow performer and looks overbought on a near-term basis based on the relative strength index, Maley said The RSI is a momentum tracker, and a reading north of 70 typically implies a stock is overbought.

Apple's RSI was seen at 78.5 on Wednesday. Investors may want to consider adding to their positions or buying the stock for the first time "on any kind of dip" instead of chasing it at current levels, Maley said. 

Morganlander: Continued Momentum

Over the next five years, a "game-changer" will take place at Apple where the services business will account for a "larger piece of the pie," said Washington Crossing Advisors' Morganlander. Given the more predictable and higher-margin nature of the services business, Apple's stock will by default warrant a superior valuation, he said. 

Despite a bullish long-term outlook, investors should be mindful of market volatility, as large-cap growth stocks will underperform value stocks over the next year, Morganlander said. The portfolio manager said he expects another 6-percent return on Apple shares in the next year.

Price Action

Apple shares were trading up nearly 1 percent at $225.15 at the time of publication Thursday.

Related Links:

Maxim Group: Apple's Long-Term Services Business 'Not Attractive Enough' For Bullish Rating

Apple Services Revenue: Not All Fun And Games

Photo courtesy of Apple. 

Latest Ratings for AAPL

DateFirmActionFromTo
Jan 2020MaintainsNeutral
Jan 2020MaintainsOverweight
Jan 2020MaintainsBuy

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Posted-In: Chard Morgananlander CNBCAnalyst Color Top Stories Analyst Ratings Movers Media Trading Ideas Best of Benzinga

 

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