“With Apple Inc. (AAPL) down about 37% from its all-time highs near $200 in late December, the risk-reward now favors buyers of the name, and Thomson Squawk Box sees early turnaround signs based on three separate stock timing indicators,” Mike Tarsala reports for Thomson Squawk Box.

“The TD Sequential timing indicators are flashing a reversal signal Monday on Apple’s daily stock chart… Trend Intensity is telling us that the stock is merely consolidating… Apple’s stock has now given back half its advance to $200 from its July 2006 lows, marking a major Fibonacci retracement. It’s an area where we would reasonably expect the stock to catch a bid,” Tarsala reports.

“Lost on most traders is that Apple’s story can be driven most heavily by market share gains for its Mac line, which carries higher price points and gross margins. Simply put, Mac can be a much bigger driver than any other product category. And with Mac, Apple posted 44% year-over-year growth in unit shipments, one of its strongest quarters in several years, driven by the company’s new and improved Leopard operating system,” Tarsala reports.

“On its post-earnings call, Apple said it remains positive about its products, as well as its strategy. The company said it remains confident it can hit its iPod goals, and it doesn’t think the market is saturated. The company backed up our conclusion about Mac, by saying that the computer part of the business is ‘on fire,'” Tarsala reports.

“Many iPhones have been sold to crafty individuals who have figured out how to unlock them for use on other carriers’ networks. While that’s a problem for Apple partner AT&T Inc., it’s not a problem for Apple. If anything, it points to opportunities for iPhone once the company signs more carrier agreements outside the U.S.,” Tarsala reports.

“We have yet to see an ironclad Apple turnaround signal. But we are starting to look for one near current levels, and would suspect that support around the $120 level, dating to August lows, provides a likely worst-case scenario for the stock in coming months,” Tarsala reports.

Full article here.