17 Nov Could this be the LAST buying opportunity for Apple Stock?
Apple is not only loved by consumers who buy their products such as the iPhone, Macbook or iPad but investors have been very pleased with the performance of the company’s stock. Since 2004, the stock price has risen as high as 7000% and this year’s performance hasn’t been shabby either, rising as high as 70%. However, since the product launch of the much anticipated iPhone 5 and the disappointment of its most recent quarterly earnings, Apple’s stock price hasn’t performed up to its investors expectations. Since hitting a share price high of $700 on Sept 21, the stock price has dropped over 20%. Is this a buying opportunity for investors who still believe in Apple’s growth story? Is this also a buying opportunity for traders who want to get back into this stock to benefit from the Christmas sales season? Well, the fundamentals of this company still look strong given consumer’s interest in their products and the ever so busy Apple retail stores. So let’s take a look at the technicals for Apple’s stock price. What I can see is a very good buying opportunity right now.
As you can see from the chart above, I’ve analyzed the price performance of Apple for the past 2 years and I see 3 technical points that leads me to be very excited about this stock right now. First, you will notice that I utilized the Relative Strength Indicator (RSI) to tell me whether this stock is overbought or oversold. If the RSI level is over 70 then it’s considered overbought and not an ideal time to buy the stock. If the RSI level is under 30 then it’s considered oversold and perhaps, a time to consider buying the stock. If you notice the green arrows in the RSI window, you’ll see that anytime the RSI level is close to 16, Apple’s stock makes a bottom and starts going back up. This is the case for 3 times in June 2011, Oct 2011 and May 2012. You will now notice that Apple’s RSI level has hit 16 again and this could a time where Apple’s stock price starts going back up.
The second reason why I am excited about this opportunity is the Hammer Candlestick formation that appeared this past Friday November 16. For those not familiar with Candlesticks, no need to worry. Just google “Hammer Candlestick Pattern” and you’ll find a lot of information about this. My point is a Hammer Candlestick Pattern basically tells us that there could be a potential stock price reversal and this could be the bottom for the stock. Also, to confirm this hammer candlestick formation, we need to see a huge amount of buyers and sellers involved and as you can see on this past Friday’s activity, there was heavy interest in this stock of well over 45 million shares traded. This volume of activity is usually well above average. The third reason is the stock price has now reached a price support level between $520-$530 which it last reached in May 2012. This could be a potentially strong price support level which may not be easily broken. In simple terms, we expect this stock to hold the $520-$530 price levels. Add on to the fact that we’re approaching X’mas season and people love to get and give Apple products and you can see my rationale that this could be the LAST BUYING OPPORTUNITY for Apple stock this year. Good luck!
Full disclosure: I do own shares in Apple (AAPL) and please consult an investment adviser before making any financial decisions.