Apple Inc. (NASDAQ:APPL) stock has been slow this year, underperforming the S&P 500 by about 3% year to date. This kind of pattern could hint a rally on the horizon, if history is any indication. On Wednesday, speaking on CNBC’s “Trading Nation,” Rich Ross – head of technical analysis at Evercore ISI – said “I really like this setup here in Apple.”
Will history repeat?
Pointing to on a two-year chart, Ross says that even though the stock looks constrained within the 50- and 200-day moving averages, a nice support is building “here after, let’s call it, a 30 percent decline off the top.”
“It’s a stock that has taken a back seat to other high fliers in the post-Trump reflationary rally, if you will, but I like it on both a short-term and a longer-term basis,” the analyst said.
Going back to history, Ross points to a setup that formed between 2012 and 2014, bearing a similarity to the moves of this year. He said the chart reflects a similar 30% to 35% pullback off the top. “We test and hold key support just as we have done in here this year, and then we have a very strong rally coming out of that,” the expert said.
Ross thinks the history will repeat, and Apple Inc. (NASDAQ:APPL) will “surprise” with an upside next year.
Bullish fundamental, but Apple needs to prove it can do
To the market strategist at 55 Capital, Max Wolff, Apple’s fundamental elements appear bullish, though there are some pain points. On Wednesday, Wolff said on CNBC’s “Trading Nation” that the iPhone maker is still a cash machine and a marquee brand in global electronics with room to grow in the developing world. But, a big problem here is “there’s sort of two different clocks running,” says Wolff.
Wolff believes that Apple Inc. (NASDAQ:APPL) needs to show that they can ramp up their revenue from services, or can come up with a new innovative product. The iPhone making giant probably has about three to five quarters to do that, or “they’re going to start to justify the worst-case scenario.”
There are several analysts, who are concerned that Apple’s newest product – the Apple Watch – has not seen the same demand as that of the iPad or the iPhone. This week, Reuters reported that the sales of the Apple Watch appear to have shown an increase in time for the holidays after slow sales in 2016.
On Thursday, Apple shares closed up 0.98$% at $112.12. Year to date, the stock is up almost 7% while in the last one-year, it is down almost 6%. The stock has a 52-week high of$ 118.69 and a 52-week low of $89.47.