Apple Stock Ready to Breakout?

There have been a whole wave of headlines regarding Apple’s stock, and the possibility of it reaching the $125-130 range.  What I wanted to do with this article was summarize the major headlines and pinpoint which factors are leading to this upgrade in the stock.  Today, analysts from Credit Suisse upgraded Apple stock and put a price target of $130 on it.  This is a large premium considering that Apple’s stock just closed at $110.22 for the day.

The analysts from Credit Suisse raised their earnings-per-share estimates based on “solid and sustainable iPhone volume.”  Apple is expected to sell far more iPhone’s in the year 2015 than what was previously estimated.  The introduction of the Apple watch is also a cause for the upgrade, as Cantor Fitzgerald analyst Brian White wrote in a research note Monday, that he saw a great deal of smart watches at the recent Consumer Electronics Show, but none like the Apple watch.  If the watch can live up to it’s praise, then I am sure Apple will make a killing off of it’s newest gadget.

The Credit Suisse analyst’s projections could prove to be conservative however, as it is said that it does not consider any of the new innovations coming out of Apple in the next year.  Those might include the rumored large-screen iPad, the lower-end iPhone and Apple TV, as well as monetization services like Apple Pay.

Apple’s technicals also look very promising with an apparent downtrend in the mix.  If the price can breakout above the downtrend line and then close above that line, then it will set the stock up for a strong appreciation through the end of the month of January.  However, if the price falls below the lower linear trend line, it could be a few weeks before we see any sort of appreciation worth mentioning.

Apple’s stock will be one to watch in the coming weeks, as a majority of Wall Street will be watching as well.  Most analysts see Apple’s stock reaching the $125-130 range through the end of January into February.  Stay tuned!

Market Update

The market made a strong move to the upside today after Ukraine-Russia tensions were said to be easing.  Personally, I do not know what people are thinking when they say that the tensions are easing.  Putin is still a threat and it doesn’t appear that he is backing off when Russian troops are still stationed in Crimea.

Anyhow, the Dow Jones Industrial Average showed strong upward momentum with a 227.85 (+1.41%) increase; the Nasdaq also showed strong gains as it was up 74.67 (+1.75%); and once again the S&P 500 ended at a new record high, up 28.18 (+1.53%).

Over the past few days I have been looking for stocks that are top gainers for the day, and with these I have been trying to find discernible stock patterns that signal why they increased so much in one day.  One such stock is ROSG.  This stock shot up +26.5% today, March 4, and I wanted to dive in and find out how one could have predicted such an increase.

Although not many people can truly predict such an increase, there are ways to identify a bullish momentum that can help you to initiate a trade. In the chart of ROSG below, you can see that I drew a few lines.  The horizontal line that I drew indicates a sort of resistance price, where the stock had a tough time breaking out above.  This price was in the 3.9 range, and since mid-June it only came close to that line twice – in early January, 2014, and February.  What I indicated with the other two lines was an upward channel.  An upward channel is a strong indicator of a bullish trend that is gaining momentum.  In mid-February, the stock price finally broke above the 3.9 range and was still within the upward channel.  At this point, one can say with confidence that the price will continue its bullish momentum, and is a definite buy.

In the future I will be publishing information about other chart patterns that indicate both bullish and bearish trends.  Stay tuned for more!