Bottompicking with Apple
Apple stock was never on my radar until the PEG ratios caught up with the price of the stock. Now that Apple stock is seeing good fundamentals line up with the technical there is plenty of reason for an investment. With a PEG ratio of 1.34 it’s playable, that’s not a bad ratio for a stock in a premium industry like tech.
But even better, Apple posted profits 31% higher than this time last year. With the recent release of a 3G iPhone and Macbook improvements such as a new touchpad on the Macbook Pro, Apple fans will find their way to an Apple locations in droves.
Unfortunately Apple did lower guidance for the 4Q but usually guides lower rather than higher. Apple forecasted $1 per share profit on sales of $7.8 Billion. Analysts are looking for $1.24 per share with $8.32 Billion in sales. Sales of the new iPhone weren’t considered in Q3 and will certainly boost the 4Q.
One the technical side the stars are apparently aligning as well. Apples drop to $149.70 per share couldn’t have fallen to a better horizontal support line. $148 a strong support, as is the $145 area. The stock, absent falling bigger at market open tomorrow, should continue back upward. The fall through the most recent line was strong, but I think we’ll see the short squeeze come back around for a bounce. Definitely a buyer at this price. Wait for a showing tomorrow at open, if it holds for the first two hours; it’s a buy.
