14-day Premium Trial Subscription Try For FreeTry Free

Apple Inc. (AAPL) Technical Analysis and Long-Term Investment Potential

StockInvest.us, 1 month ago

Apple Technical Analysis

Apple Inc. (AAPL) closed on May 17, 2024, at $189.87, representing a marginal daily increase of 0.02%. The stock's price fluctuation between $189.22 and $190.81 indicates today's trading range, while its 52-week range spans from $164.08 to $199.62. Currently, AAPL is trading close to its historical high, reflective of positive market sentiment.

The Relative Strength Index (RSI14) stands at 76, placing the stock in the overbought territory. This suggests that the stock might be due for a short-term pullback. The 50-day and 200-day moving averages are $173.69 and $180.79, respectively. The stock trading above both these averages indicates a strong upward trend. The Moving Average Convergence Divergence (MACD) is positive at 4.82, reinforcing the bullish momentum.

The Average True Range (ATR) of 1.77 suggests moderate volatility. The immediate support level is established at $183.38; absence of clear resistance levels highlights potential for upward movement. A stop-loss at $180.41 is prudent to protect against downside risks.

Fundamental Analysis

Apple Inc. boasts a remarkable market capitalization of $2.91 trillion, reaffirming its position as one of the top global enterprises. The stock's Price-to-Earnings (PE) ratio of 29.48 reflects a premium valuation, indicative of high investor expectations for future growth. Apple's latest Earnings per Share (EPS) is noted at $6.44. Earnings announcement slated for August 1, 2024, could be a pivotal event.

Analyst sentiment is generally positive with 23 'buy' ratings, 9 'hold', and 3 'sell'. The consensus price target is $192.39, relatively close to the current share price, suggesting limited upside in the short term. However, with a target high of $240, some analysts foresee substantial longer-term growth.

Apple Intrinsic Value

The DCF model calculates the stock's intrinsic value at $135.81, which is significantly lower than the current market price. This disparity suggests that the stock might be overvalued based on the cash flow projections.

Next Trading Day and Weekly Prediction

Considering the technical indicators, a slight near-term correction or consolidation could occur due to the high RSI, which indicates overbought conditions. For the next trading day on May 20, 2024, investors might witness minimal fluctuations within the $187-$192 range. Over the upcoming week, barring any unexpected market news or economic events, AAPL may experience marginal gains or stabilization around current levels.

Long-term Investment Potential

While the DCF suggests overvaluation, Apple's strong market position, ongoing innovation (e.g., the potential release of a slimmer iPhone by 2025), and historical ability to deliver shareholder value make it a solid long-term investment. Strong brand loyalty and a diversified product ecosystem add to its robust fundamentals. (AAPL) is evaluated as a 'Hold' candidate. This assessment balances its overbought technical status, current valuation metrics, and strong long-term fundamentals. The stock's current price positions it for steady gains, but short-term investors should be cautious of potential corrections. Long-term prospects appear favorable given Apple's innovative pipeline and market dominance.

Check full Apple forecast and analysis here.