Be Patient Before Adding Apple Positions To Your Portfolio

(Photo by Josh Edelson / AFP)


AFP via Getty Images

Apple

AAPL
set its all-time intraday high of $182.94 on January 4. At this high the market capitalization exceeded three trillion dollars. This high was just below its quarterly risky level at $184.15.

Most analysts on Wall Street still recommend buying Apple without regard to these statistics.

Apple has an elevated p/e ratio of 32.39 with a dividend of just 0.48%, according to Macrotrends. The stock had beaten earnings-per-share estimates in nineteen consecutive quarters, and this ended with its latest earnings released on October 26 when EPS matched estimates.

Apple is arguably the most popular stock on the planet. The daily chart shows that the stock held its 200-day simple moving average on May 12, 2021, when the average was $122.96. The stock nearly tested its 200-week simple moving average at $35.46 during the week of January 4, 2019, when the average was just $35.46. Long-term investors thus have huge gains in shares of Apple.

The Daily Chart for Apple

Daily Chart for Apple. Courtesy of Refinitiv Xenith.


Refinitiv

The daily chart for Apple shows how the 200-day simple moving average held as key support between May 13, 2021, and June 3, 2021, when the average was $124.26.

Going into 2022 the chart shows four horizontal lines. At $178.68 this morning, Apple is trading between its monthly value level at $173.21 and its quarterly risky at $184.15. The stock is well above its semiannual and annual value levels, which are the horizontal lines at $163.16 and $141.26. The 50-day and 200-day simple moving averages are $163.98 and $144.83, as the golden cross continues.

The Weekly Chart for Apple

Weekly Chart for Apple. Courtesy of Refinitiv Xenith.


Refinitiv

The weekly chart for Apple is positive but overbought with the stock above its five-week modified moving average of $169.37. It’s well above its 200-week simple moving average or ‘reversion to the mean’ at $86.48.

The 12x3x3 weekly slow stochastic reading is projected to rise to 83.78 this week, up from 81.39 on December 31. If this level rises above 90.00, the stock will be in an inflating parabolic bubble formation.

Trading Strategy: Buy weakness to its monthly and semiannual value levels at $173.21 and $163.16. Reduce holdings on strength to its quarterly risky level at $184.15.