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Apple shares advanced after the US Presidential election

By: Invezz
Apple shares advanced after the US Presidential election

The attention of investors is focused currently on the US presidential elections and the US stock market is supported despite ongoing election uncertainty. Joe Biden has taken the lead in Pennsylvania and is also ahead in Georgia, Nevada, and Arizona. Joe Biden has a good shot at becoming the 46th President and Biden’s camp hopes they will cross the threshold of 270 very soon.

Fundamental Analysis: Apple’s business continues to grow

Apple (NASDAQ: AAPL) shares have advanced from $107.3 above $119 in less than five days and the current price stands around $118. The technical picture implies that the price may advance above $120 this November but there are also some obvious risks when it comes to buying Apple shares.

Apple has released recently Q4 earnings results, total revenue has increased by 1% Y/Y while Q4 GAAP EPS was $0.73. Despite this, iPhone sales fell in Q4 but the company declared a $0.205/share quarterly dividend which is in-line with prior on a split-adjusted basis.

“Our sales results and the unmatched loyalty of our customers drove our active installed base of devices to an all-time high in all of our major product categories. We also returned nearly $22 billion to shareholders during the quarter, as we maintain our target of reaching a net cash neutral position over time,” says CFO Luca Maestri.

According to the latest news, Apple is facing a power management chip shortage for its new family of iPhones and other devices in the important holiday shopping season. It is still not clear how much the chip shortage will hurt the company but Apple has ordered 20M older iPhone models from suppliers to offset any 5G iPhone delays during the busy shopping season.

Apple shares have found strong support above $100 and some analysts believe that Apple may start trading even higher in the upcoming weeks. At its current share price, Apple could be a very good short-term investment with solid growth prospects.

I said short- term investment because with $2.02T market capitalization this stock is overvalued in my opinion and represents opportunity only for short-term traders. Profitability ratios also confirm this, P/E is above 30 which confirms that this stock is expensive. The risk/reward ratio is not good currently and maybe it is not the best moment to invest in Apple shares.

Technical analysis: Bulls are focused on breaking the resistance level at $120

Data source: tradingview.com

On this chart, I marked important resistance and support levels. The important support levels are $110 and $100, $120, $130 and $140 represent the resistance levels. If the price jumps above $120 it would be a signal to buy Apple shares and we have the open way to $130.

Rising above $130 supports the continuation of the bullish trend and the next price target could be located around $140. On the other side, if the price falls below $100 it would be a strong “sell” signal and we have the open way to $90.

Summary

The US elections are closely watched, according to the latest news Biden is taking the lead in Georgia, Pennsylvania, Nevada and Arizona but the US presidential election continued to progress with a winner not yet officially announced. Shares of Apple have been one of the market’s biggest winners in the last several months. Apple’s Q3 report and stock split announcement sent the stock to a new all-time high above a split-adjusted $100, and the rally continued to nearly $138. Apple shares are trading currently around $118 but if the price jumps above $120 the next target could be located at $125 or even $130.

The post Apple shares advanced after the US Presidential election appeared first on Invezz.

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