Apple Inc. (NASDAQ:AAPL) stock just had its longest losing streak in 18 years, and in the process, edged closer to the lows set in February. With shares perched at such a key support zone, bulls would be hoping for a short term bounce. But given the intensity of last week’s selling, the odds of that happening seem dim.
Apple ended Monday at $93.64, down 0.1 percent for the session. Based on yesterday’s closing price, AAPL is now 10 percent below its “bear market territory,” which is defined as a 20 percent drop from its 52 week high, set in April of last year.
Apple Inc. Stock to $85?
Apple shares, once considered a “must have” in every investor’s portfolio, has been under pressure lately, with the stock falling close to 11 percent in the last 5 trading sessions. The slide began after the tech giant reported Q1 results that showed its first-ever quarterly dip in iPhone sales, as well as its first y-o-y quarterly revenue drop since 2003.
Panic set in, with many arguing that its best days were over. The stock nose dived from around $110. But what is even more worrying from a technical stand point is the huge volume associated with the sell off. Bottoms are seldom formed on huge volumes. It looks like more pain is in store. A break down below $92 could take the stock all the way down to $85. That’s almost 10 percent below yesterday’s close.
To see a list of high yielding CDs go here.
Apple Inc. Stock is a Long Term Hold?
Though the short term technical outlook remains bearish, some analysts reckon that the fundamental growth story is intact, and are advising investors against dumping the stock.
Leading the pack is widely followed market voice Jim Cramer, who notes that Apple shares should be owned and not traded.
“We need to remember that every time people have written off Apple in the last 15 years, it has been a mistake,” he said on CNBC.
Wells Fargo analysts Maynard Um, Jason Ng and Munjal Shah, in fact, consider the current decline in the stock as a great opportunity for long term buyers.
“Analysis suggests now would be the time to get more bullish on AAPL shares….our units per carrier analysis suggests that investors should get bullish around the iPhone 7 cycle,” they wrote to clients.
Apple Inc. (NASDAQ:AAPL) shares currently trade at around 7 times forward earnings (excluding cash). That’s 10 points below S&P 500’s valuation. Wells Fargo has an “Outperform” rating on Apple, with a target price range of $120-$130 a share.