Buy Apple stock? - The analysis

The Apple share in the technical analysis taking into account an overall market assessment. Buy the Apple stock now.

The upward trend is powerful.

Trend-seekers will be put to the test in the next few weeks. We're in the third quarter reporting season! If the companies have theirs Presenting quarterly figures and forecasts, there is always an expectation among stock marketers. And if the real numbers cannot be reconciled with expectations, there will be crazy prices.

You will therefore experience that companies offer excellent figures, and then the course plummets. There is another way around: Bad quarterly figures and rising prices. In this case, the expectations were so low that the relatively bad numbers are perceived positively again. A stock exchange world with apparent contradictions, which on closer inspection are not contradictory.

Quarterly figures should only be secondary for trend traders. Experience shows that a trend is more powerful than a short-term spur. As long as the trend is not broken, there is no reason to change anything in a position.

In this regard, Amazon stock is a good example. Almost every quarter, the company disappointed stock marketers because expectations were high. Mostly there are short-term price losses, which are immediately perceived as an incentive to buy. In 2008, the stock was at $ 40, and it is now trading at $ 1,100. What a rally!

With this in mind, keep your trend stocks in the portfolio. If the quarterly numbers lead to price losses, stay calm and consider whether it makes sense to sit out the losses.

The American stock markets are climbing from one high to another. The mood is excellent. A feature that speaks for the continuation of the general upward trend.

AAII survey (from 02.11.17)

The bullish tendency confirms the survey data of the AAII (American Association of Individual Investors) Bullish 45, 1% à + 5.4% neutral 26.8% à -1.0% bearish 26.6% à -4.5%

The bullish share is very high, and a lot since the latest survey higher. The historical average for the bulls is only 38.5%. The distance is therefore an alarm signal. One has to ask the question whether there are enough new buyers to surpass the highs of the stock markets. A short-term exhaustion of the markets is possible.

Image: Weekly chart of the S & P500 with the ADL

With the Advance Decline Line ( ADL) the difference between the rising and falling shares is calculated. Basically, every movement of the index should be confirmed by the indicator. If there is no confirmation, this means that the majority of the shares are behaving differently.

The mood is a little too bullish, but a look at the Advance Decline Line (ADL) shows an exemplary trend. The ADL moves similarly to the course of the S & P500. This speaks for a high trend stability.

Trend analysis of the largest Dow Jones companies (Mighty Five)

Short-term = trend analysis of the past 40 daysMid-term = trend analysis of the past 40 weeksLong-term = trend analysis of the past 40 months

Trends Name Kurzfr. Mittelfr. Langfr. ApplelonglonglongGeneral ElectricshortshortflatIBMlongflatshortJohnson & JohnsonlonglonglongMatrosoftlononl3glatflxxxlonglongl3l13flxxxx Dow Jones Mighty

The table above shows the largest companies in Dow Jones Industrial by market capitalization. These companies are extremely important to assess the growth potential of the US stock market. In the table above the trends are considered on three different time levels. Three of the companies show a pronounced upward trend that should continue in the coming months. It is usually the case that there should be a trend of at least two time levels. Specifically: Apple, J&J and Microsoft are attractive for a year-end rally.

Buy Apple stock? - The analysis

Apple in focus - buy shares?

You don't have to present Apple's shares. Everyone connects a whole range of products to Apple. As a rule, the products are coordinated with one another and force customers into Apple mode. This is a tendency that indirectly forces the end consumer to purchase a second supplement after buying one Apple product.

The most important Apple product is the iPhone. As you know, Apple makes a lot of money. 60-70% of sales come from sales of the iPhone. This makes it clear that Apple is very dependent on the successful product. With every message about the iPhone's sales figures or delivery difficulties, the company's stock fluctuates violently.

In the coming winter, the focus will be on the new iPhone X. Analysts are very excited to see how the product is received by customers. The indications have so far been positive. The Canalys market research institute predicts a 40 percent increase in sales. With regard to the iPhone X, there is another, almost greedy demand. The delivery times after the start of the pre-order phase at 5-6 weeks. The new iPhone contains new technologies such as "Augmented" and Virtual Reality. These technologies are becoming increasingly important in the smartphone business. This creates an additional incentive to purchase to benefit from the latest technology.

Apple's business figures


Figures in million US dollars Source:

Figures for 2017, 2017 and 2018 are estimates

Particularly impressive are the high profits within the business figures. Hardly any other company in the electronics sector can show such a return. Apple's sales always depend on the success of the products. Accordingly, there are high expectations. If you look at the forecasts regarding sales and profits, you will notice that Apple has reached a certain threshold, where further sales and profit increases are hardly feasible. Apple is very successful, but the competition doesn't sleep. It is difficult to imagine that Apple will be able to achieve further double-digit percentage sales and profit increases in the next few years.

A little imagination comes from the intention that Apple will enter the booming video-on-demand business in the future would like to. The plans to do so seem concrete. The well-known director Steven Spielberg has been hired for a film and series production.

Although the share has developed excellently in recent years, it should not be forgotten that every company is reaching a growth limit. Whether this limit has already been reached at Apple depends on the skills of the management. In the past, the company shone with its new ideas. The brilliant Steve Jobs is unfortunately dead. He had the ability to concentrate the company on defined areas and to build an Apple myth.

Image: Weekly chart of Apple shares

The price situation of the Apple share

Without a doubt the share is in a strong upward trend. With an internal trendline break, the RSI indicator shows that price momentum is in the upward movement. There is no historical resistance upwards that could slow the momentum. Important facts speak for rising prices: upward trend, seasonal conditions and the Apple hype.

The price targets shown in the chart are based on projections of the trend channels. They are reached with an above-average probability.

Whether the share continues to rise is closely related to future sales from the Christmas business. So far, the Apple share has been extraordinarily good. However, this will not always be the case. It is therefore particularly important to set a stop loss.

Pay attention to critical course points. This means course areas that have a psychological effect on market participants. For example, if the price drops below $ 138, the bullish image of the chart changes. Although the upward trend channel is not yet broken, most market participants expect the price to move sideways below $ 138.

Buy recommendation: Apple share: WKN: 865985 or US symbol AAPL

Price target: $ 198.00

Interim target: $ 184.00

Stop loss: $ 138.00

Trading conversion:

If you want to benefit from the short-term stock recommendation, you can buy the stock directly or work with derivatives. Note that derivatives include leverage and therefore increase the profit and loss potential. In extreme cases, a total loss is even possible.

Trading information:

Stop loss: The stop loss is initially set as an initial stop and has the function of a maximum Loss limitation.

Price target: The price target is the exit point for the forecast market movement.

Interim target: When the intermediate target is reached, the position is in profit. At this point we take a partial profit and we sell 50% of our position. At the same time, the stop loss is adjusted to the personal entry price. This enables us to close our position without loss, even if the market later turns against us.

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