Apple Buy Signals (Technical Analysis, Upgrade)

Summary:

• Apple Inc. CEO Tim Cook’s announcements have triggered buy signals for the company’s stock.
• The new iPad and upcoming AI news are expected to contribute to Apple’s positive performance.
• Despite slow revenue growth, investors still chase Apple’s free cash flow and buybacks, although Warren Buffett has sold some of his position.

CEO Tim Cook pulled out all stops for Apple Inc. (NASDAQ:AAPL) earnings and triggered blue, vertical line, Buy Signals shown on both the daily and weekly reports below. Both the short term and longer-term signals are targeting a test of resistance at $190.

The rollout of the new, super thin, iPad will help to feed the continued good news. Then there is the promise of AI news coming soon. Finally, the rollout of the iPhone 16 just to keep the dream alive that AAPL is still a growth company. For the last year, it has not grown revenues very much. Investors love its enormous free cash flow and buybacks, but Warren Buffett just sold some of his AAPL position and opted to use it as a source of funds. He still has an enormous position in AAPL and fantastic gains.

Here is the daily chart, and we have drawn our vertical, blue line Buy Signal triggered by the Full Stochastic signal at the top of the chart:

As you can see on the above daily chart, other signals are confirming the blue line Buy Signal. Chaikin Money Flow, or CMF, is turning up and a change in direction is important. The MACD crossover, Buy Signal, occurs near the blue line. Likewise, AAPL switches from under-performer to out-performing the Index near the blue line. Also, the ADX signal at the bottom of the chart shows Demand crossing over the dropping Supply line and happening near the blue line Buy Signal.

Now let’s turn to the longer-term weekly chart Buy Signal, which indicates the gap up on the daily chart may not be filled short term. Instead, the positive news on AAPL could continue to take the price higher to $200. Here is our weekly chart with the signal at the top triggering our vertical, blue line Buy Signal:

You can see the positive signals on the above chart, especially the MACD and ADX Buy Signals. However, there are some caveats, namely our proprietary SID Sell Signal which uses both fundamentals and technicals. Our SID signal has a fundamental bias against overvalued stocks.

We do our due diligence by checking our SID signal with Seeking Alpha’s quant scores. SA quant grades give AAPL an “F” grade for Valuation. This confirms our own fundamental read on AAPL. In addition, SA gives AAPL a “D+” for Growth. This is a deadly combination. An “A” for Growth and a poor grade for Valuation would be typical for aggressive growth stocks.

AAPL is not aggressive growth, but a blue chip. SA gives AAPL an “A+” for profitability and a B- for Revisions, which is typical for blue chips that have good earnings but no aggressive growth. However, blue chips should not earn an “F” for Valuation, and that is the big problem for AAPL, especially if the market turns from bull to bear.

Meanwhile, let’s enjoy the technical Buy Signals on the chart and AAPL’s attempted move to the top of the trading range.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AAPL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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