Apple's Stock Could Be On The Verge Of Another 30% Rally
It's been a good summer for equities in general after a torrid first half of the year, but Apple (NASDAQ: AAPL) is having a particularly sunny couple of months.
While it's been a good summer for equities in general after a torrid first half of the year, tech titan Apple (NASDAQ: AAPL) is having a particularly sunny couple of months. Since the start of June their shares have rallied more than 30%, effectively reversing the 30% drop they'd been experiencing since March. What had initially looked like a bull trap soon became a full-on trend reversal, and as markets trade through these dog days of summer, Apple's shares are suddenly within a couple of dollars of hitting all time highs.
Those in the bear camp might be licking their chops at the thought of Apple soon starting to hit resistance and forming a dangerous technical triple top around the $180 level, as this could be the harbinger of a fresh bout of selling. But there are plenty of louder voices saying this might just be the first half of what will turn into a multi-month rally.
Yesterday morning, the team over at Bank of America called for significantly more upside to be unlocked in Apple's shares, on the assumption that they can get above their previous all time high from last December. Chief Market Technician Stephen Suttmeier said that if Apple were to hold above or near the $157-$150 area on dips, that would set up a "bullish head and shoulders continuation pattern." And if that happens, the stock could then turn upwards again towards the highs of around $176 to $183, seen in December 2021. And if that happens, Suttmeier believes it would confirm the pattern and there could be "further upside" for the tech giant, perhaps as high as $230.
Sure there are a couple of ifs and buts in this hypothesis, but the technical foundation of the argument holds true. It was a sentiment echoed by Gene Munster over at Loup Ventures yesterday as well, who took a similarly bullish stance albeit over a longer term view. He thinks shares of Apple can push substantially higher over the coming years, thanks to the stability of the company's underlying business and the chances it will tap into major new markets with the products it currently has in development.
In an interview with CNBC, he said "I think that from an upside potential, I think there is still measurable upside, I think 40%+ upside over the next couple years, around $250." Munster justified this target by pointing to a stable business for its current list of products, like the iPhone, combined with the growth potential it could see with some of its developmental projects. On its current lineup, the Loup Ventures founder estimated that 70% of the tech giant's current offerings are necessities, not discretionary purchases. This could give the company a floor if the economy slows in the near term.
This is solid stuff to be hearing for those of us thinking about buying into this rally. Adding further support to the bull case are the comments from Ming-Chi Kuo at TF International Securities, who last week talked about ways Apple could go about minimizing the impact a possible recession might have on consumer demand. One tactic could be for them to announce several new products ahead of their scheduled September event, and success here would bolster the case for Apple being a truly recession proof stock. Compared to their peers from the FAANG group of tech stocks, they are by far and away the best performer in 2022, with the likes of Netflix (NASDAQ: NFLX) and Facebook (NASDAQ: META) being so far off the pace as to not even be worth comparing against.
Apple is well worth its place on investors' watchlists for the moment, and there's a strong case for them to be in your portfolio too. The company has managed to weather what feels like a year of non-stop inflation and supply chain headwinds, while still getting its shares to trend towards fresh all time highs. If that $180 can be cracked in the coming weeks, it's not hard to see them pressing on into the $200s.
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