Apple’s Chart Is Showing a Breakout. What Might Happen Next?
Apple 
AAPL has lagged its fellow “Magnificent 7” stocks for so long that market pundit Jim Cramer has said to "own it, don't trade it." But recently, the stock broke out of a technical pattern known as an “ascending triangle” -- a potentially bullish sign.
What does AAPL’s technical and fundamental analysis say might happen next? Let’s that a look:
Apple’s Fundamental Analysis
Is Apple’s future all about its new AI-capable features, which are finding their way into the tech giant’s electronic gadgets? At least some of it might be.
Or is it about the slow-but-steady growth of Apple’s high-margin services businesses, which benefit from the company’s huge installed base of connected gadgetry? We’re probably getting even warmer there.
How about earnings? AAPL reported on Oct. 31 that it earned $1.64 of adjusted earnings per share on $94.9 billion of revenue in the company’s fiscal fourth quarter ended Sept. 28.
Adjusted EPS beat the Street’s consensus estimate by $0.04, while revenues not only beat forecasts but represented 6.1% in year-over-year growth.
In fact, Apple has grown sales by roughly 5% or 6% year on year for five consecutive quarters now. Talk about consistency.
Apple will likely report results for the current quarter in late January. As I write this, Wall Street is looking for the company to record $2.36 in adjusted earnings per share on $124.4 billion in revenues.
That would compare favorably to the $2.18 in adjusted EPS and “just” $119.6 billion of revenues that Apple saw during the same quarter a year earlier. I say "just" because such a number would still represent 4% year-over-year sales growth for the firm.
But for many investors, Apple has always been about cash flow and return of capital to shareholders.
Apple generated $118.2 billion of operating cash flow in the 12 months ended Sept. 28. The company spent $9.5 billion out of that number on capital expenditures, leaving $108.8 billion of free cash flow.
AAPL returned all of that and more to shareholders over the trailing 12 months. The firm repurchased $100.4 billion of its common stock, while also paying out $15.2 billion in dividends to shareholders.
Apple’s Technical Analysis
Now let’s look at AAPL’s chart as of Wednesday, going back some eight months:
Readers will see that the stock rallied from mid-April into July, but then sold off.
Shares then found support in early August in between the 50% and 61.8% Fibonacci retracement levels of the entire rally, as denoted by the black horizontal lines at the chart’s left.
From there, AAPL formed what’s called an “ascending triangle” pattern, marked with the purple lines in the chart above.
The triangle’s top line held as a resistance level in October, but Apple hit successively higher lows from April all the way through the ascending triangle’s closure earlier this month. That’s typically a bullish sign.
The pivot coming off of the ascending triangle stands at $238 in the chart above -- below the $249.79 that the stock closed at on Thursday.
Does that mean that Apple’s upward run is near or at maturation? Not necessarily.
A 20% run from a pivot point is historically reasonable for a Mag-7 stock, which would put the stock at $285.60 -- or about 14% above Thursday’s closing price.
Meanwhile, Apple’s Relative Strength Index (the gray line at the top of the chart) looks extremely strong as well, to the point of being technically overbought. However, that condition can often last longer than one might think.
Similarly, the stock’s daily Moving Average Convergence Divergence indicator -- or “MACD,” denoted by the black and gold lines and the blue bars at the bottom – seems quite bullish.
Apple’s 12-day Exponential Moving Average (or “EMA,” marked with a black line) is sitting above the stocks 26-Day EMA (the gold line), while the histogram of AAPL’s 9-Day EMA (the blue bars) is above zero. All of those components lined up in that way are historically positive for stocks.
Another apparent bullish sign is the fact that AAPL’s shorter-term moving averages are running above its longer-term ones.
The chart above shows Apple’s 21-Day EMA (marked with a green line) above its 50-day Simple Moving Average, or “SMA,” as denoted by a blue line. Similarly, Apple’s 50-day SMA is in turn running above Apple’s 200-day SMA, marked with a red line above.
Such relationships typically serve as confirmation of an uptrend.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in Apple at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
AAPL has lagged its fellow “Magnificent 7” stocks for so long that market pundit Jim Cramer has said to "own it, don't trade it." But recently, the stock broke out of a technical pattern known as an “ascending triangle” -- a potentially bullish sign.What does AAPL’s technical and fundamental analysis say might happen next? Let’s that a look:
Apple’s Fundamental Analysis
Is Apple’s future all about its new AI-capable features, which are finding their way into the tech giant’s electronic gadgets? At least some of it might be.
Or is it about the slow-but-steady growth of Apple’s high-margin services businesses, which benefit from the company’s huge installed base of connected gadgetry? We’re probably getting even warmer there.
How about earnings? AAPL reported on Oct. 31 that it earned $1.64 of adjusted earnings per share on $94.9 billion of revenue in the company’s fiscal fourth quarter ended Sept. 28.
Adjusted EPS beat the Street’s consensus estimate by $0.04, while revenues not only beat forecasts but represented 6.1% in year-over-year growth.
In fact, Apple has grown sales by roughly 5% or 6% year on year for five consecutive quarters now. Talk about consistency.
Apple will likely report results for the current quarter in late January. As I write this, Wall Street is looking for the company to record $2.36 in adjusted earnings per share on $124.4 billion in revenues.
That would compare favorably to the $2.18 in adjusted EPS and “just” $119.6 billion of revenues that Apple saw during the same quarter a year earlier. I say "just" because such a number would still represent 4% year-over-year sales growth for the firm.
But for many investors, Apple has always been about cash flow and return of capital to shareholders.
Apple generated $118.2 billion of operating cash flow in the 12 months ended Sept. 28. The company spent $9.5 billion out of that number on capital expenditures, leaving $108.8 billion of free cash flow.
AAPL returned all of that and more to shareholders over the trailing 12 months. The firm repurchased $100.4 billion of its common stock, while also paying out $15.2 billion in dividends to shareholders.
Apple’s Technical Analysis
Now let’s look at AAPL’s chart as of Wednesday, going back some eight months:
Readers will see that the stock rallied from mid-April into July, but then sold off.
Shares then found support in early August in between the 50% and 61.8% Fibonacci retracement levels of the entire rally, as denoted by the black horizontal lines at the chart’s left.
From there, AAPL formed what’s called an “ascending triangle” pattern, marked with the purple lines in the chart above.
The triangle’s top line held as a resistance level in October, but Apple hit successively higher lows from April all the way through the ascending triangle’s closure earlier this month. That’s typically a bullish sign.
The pivot coming off of the ascending triangle stands at $238 in the chart above -- below the $249.79 that the stock closed at on Thursday.
Does that mean that Apple’s upward run is near or at maturation? Not necessarily.
A 20% run from a pivot point is historically reasonable for a Mag-7 stock, which would put the stock at $285.60 -- or about 14% above Thursday’s closing price.
Meanwhile, Apple’s Relative Strength Index (the gray line at the top of the chart) looks extremely strong as well, to the point of being technically overbought. However, that condition can often last longer than one might think.
Similarly, the stock’s daily Moving Average Convergence Divergence indicator -- or “MACD,” denoted by the black and gold lines and the blue bars at the bottom – seems quite bullish.
Apple’s 12-day Exponential Moving Average (or “EMA,” marked with a black line) is sitting above the stocks 26-Day EMA (the gold line), while the histogram of AAPL’s 9-Day EMA (the blue bars) is above zero. All of those components lined up in that way are historically positive for stocks.
Another apparent bullish sign is the fact that AAPL’s shorter-term moving averages are running above its longer-term ones.
The chart above shows Apple’s 21-Day EMA (marked with a green line) above its 50-day Simple Moving Average, or “SMA,” as denoted by a blue line. Similarly, Apple’s 50-day SMA is in turn running above Apple’s 200-day SMA, marked with a red line above.
Such relationships typically serve as confirmation of an uptrend.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in Apple at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
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