FX

Apple (AAPL) stock forecast: AAPL breakout gains momentum with record highs in sight and $157 target

  • Apple shares continue on their target of new record highs.
  • Big tech names and Facebook (FB) especially all register gains.
  • Apple targets $137 resistance on its way to new highs.

Another day of solid gains for AAPL stock on the way to test the next resistance level at $137.07. Apple shares have been on a steady bullish trend since the middle of May as the stock had retreated from what is now resistance at $137. The earnings release was good and AAPL shares had an initial pop to $137 before sliding gradually down to the low $120’s. This thoug,h was a very strong support region with AAPL stock having consolidated at this level previously in February and March. It was also the zone where the 200-day moving average sat, so further adding to its strength zone. Apple stock has not traded below its 200-day moving average since March 2020 and the pandemic induced sell off. Since then it has pretty much been comfortably above the average.

So $137 the first test, the post earnings high. Those earnings as we have mentioned before were very strong and not the reason for the sell off in the stock. There is a well-worn line in financial markets “buy the rumour sell the fact” but even rumours of Apple’s results did not see them coming in 40% ahead of most analysts forecasts. Not too many also foresaw Apple increasing its dividend and increasing its buyback program. That was the reason for the initial enthusiasm and the spike to $137. Thereafter a general fear of inflation set into markets and caused the Nasdaq, in particular, to move lower. 

Now however the tide has turned, the Nasdaq is making record high after record high. Big tech names are booming, Facebook (FB) yesterday joined the trillion dollar club and most other FAANG names are sitting just at or near record highs. Yesterday’s price action in Apple as we can see from the chart below was a bull flag on the intraday with a strong opening surge followed by a period of consolidation. Setting the scene for further gains.

Apple key statistics

Market Cap $2.25 trillion
Enterprise Value $2.1 trillion
Price/Earnings (P/E) 30

Price/Book

35
Price/Sales 8.5
Gross Margin 40%
Net Margin 23.4%
EBITDA $100 billion
Average Wall Street rating and price target Buy $159

AAPL stock forecast

The triangle breakout is still working according to plan with Mondays move engulfing the previous candles from Thursday and Friday and reigniting the bullish trend. Some indecision had been creeping in but this new move has dispelled that. This is a perfect strong trend with the 9-day moving average guiding the move higher. This would be a first dip zone to try buying, $132.53. A break of that and most classic technical analysis will look for the 21-day moving average but that is now a bit too far below and a dip to there ($130.45) would put the trend in question. 

Breaking $137 is the real prize for bulls with the move looking to accelerate as volume dries up above this price. There should not be too much trouble moving to new record highs once $137 is broken.

Risk reward firmly skewed to the upside. Apple is above the key moving averages and trending nicely as confirmed by the momentum oscillators (Commodity Channel and Relative Strength Indices, CCI and RSI). The triangle breakout is a classic bullish move and the target would be the size of the entry leg, in this case, $25. The breakout occurred at $132 so the target is set at $157.


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