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Possible Bottom For Apple?

  • Written by Syndicated Publisher No Comments Comments
    July 15, 2013

    After a vicious -45% decline from all-time highs, Apple (AAPL) looks as if it may finally be bottoming.  Things we like on the chart: (1) an apparent double bottom; (2) contracting volume at the April and June price lows; and (3) the positive divergence expressed by the rising PMO bottoms.

    (This is an excerpt from recent blogs for Decision Point subscribers.)

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    Screen shot 2013-07-12 at 10.05.05 AM

    Things we don’t like: (1) the price advance off the most recent low has been sluggish with no enthusiasm reflected in volume; and (2) the relative strength line in the bottom panel shows that the stock is still under-performing relative to the S&P 500 Index.

    A brief review of fundamentals indicates that AAPL is undervalued, with a P/E of 10. And it is a good company with lots of cash that pays a dividend of 2.9%.

    Conclusion: Apple has taken a beating during the last 10 months, but the technicals show that a bottom is currently forming. We can’t say that this is THE bottom, but it is the most promising looking bottom since the decline began. This is not a recommendation to buy or sell this stock.

    Images: Flickr (licence attribution)

    About The Author

    Carl SwenlinCarl Swenlin is a self-taught technical analyst, who has been involved in market analysis since 1981. A pioneer in the creation of online technical resources, he is president and founder of DecisionPoint.com, a premier technical analysis website specializing in stock market indicators, charting, and focused research reports. Mr. Swenlin is a Member of the Market Technicians Association.