Why Apple stock is likely to stage a dramatic rally within the next 10 weeks

“In our January 16 post rebutting Pacific Crest Securities analysis of Apple’s likely share price range for 2013, we explained that the average quarterly volatility for shares of Apple over the past few years has been roughly 3.3x the trailing twelve month earnings,” Three28Capital writes. “With current LTM earnings of $44.10, this quarter’s price action should range $146.80 from low to high. Based on the low price of $435 this quarter, this range implies a high price of $582 during the current quarter.”

“Even the lowest volatility we’ve seen over the past four years would get the shares to $540, or a 22% rally from yesterday’s closing level. The four-year median of $580 implies a 31% price appreciation in the next 10 weeks,” Three28Capital writes. “We’ve reached the conclusion that, if the current low holds, Apple should see a dramatic rally at some point over the next 10 weeks.”

Read more in the full article here.

21 Comments

  1. Don’t know about that. But, there is a lot of Dell investors that just got kicked to the curb and just opened up the technology sector in their portfolios. I think Apple will fix in that spot real well.

    1. Kicked out of Dell–investors should be thrilled with the 25% lift today and move onto a growth story and not the opposite, Dell is a sinking ship, just my two cents ………

    1. Smartest comment I’ve seen in four months. And it doesn’t have to reach $700. You simply need to make a profit. Whatever you are comfortable with. Remember, you don’t invest to brag about holding shares of any company. Even Apple. The most difficult decision in investing is selling. Selling when you’re up or selling when you’re down. Learn to be a disciplined investor. Learn not to be greedy. Learn that all stocks go up and all stocks go down. Even Apple. You just can’t buy a stock and hold it forever. It just doesn’t work. And for all those who claim that they bought Apple low and have ridden it up, that has nothing to do with taking profit and reentering ever so often. Nothing at all. It’s a fool’s argument. Learn to take your profit and reinvest at a lower entry point. And you don’t have to be a market timer or daytrader to do this. And you don’t have to do it that often either. Just use common sense. I certainly hope that AAPL goes up for the sake of all those who are underwater. Many of them will do better next time. But sadly others will not. They will repeat this mistake again.

        1. Nope. Just an investor who learned during the dotcom bubble that you can’t hold a stock forever. Lost my ass! Finally realized that the reason I invested was to make a profit. Not to brag about owning the stock of a company. Any company. Even Apple. You can’t spend the profit when it’s only on paper. You have to learn to take your profit off the table. You have to learn to diversify in different areas. But most of all, you have to learn to sell occasionally. Yes you can buy and hold forever and in the end you may or may not be ahead? But along the way had you sold and reentered the same stock you would have been made many times the profit in the in. It’s not daytrading or even market timing. It’s just learning to not be greedy. And that’s difficult to do. But what holds back most people is the fear of selling. And that’s hard to do. And laziness. Who wants to take the time to sell something when you can just buy it and forget it? Right? It’s easier just to buy it and hope that it continues to go up. Nothing goes up forever. If you don’t manage your money you may not have any money to manage. Stay involved with your investments.

          1. If your buying back the same stock then you have to hope it dips far enough so you can pay your capital gains tax and still buy back the same amount of shares with the rest. Either way its a dangerous game. But you havent made anything until you sell. But the fact is nothing goes strait up. There will always be pullbacks. If you sell Apple at 600 and it goes to 675 you will still buy it back for 550 eventually.

            1. Mine are mostly in IRA’s. But even in my taxable accounts it still makes sense. Taxes are pretty easy to figure out ahead of time. Right? Of course they are. Always be happy to pay taxes because that means you made money. You just can’t buy and hold forever. It makes no sense. Yes there’ll always be pullbacks. Correct, nothing goes straight up forever. The only danger is holding and not paying attention to your investment. You invest to make money. If you don’t cash in at the appropriate time, you will be left holding the bag. It happens all the time. Kind of like since September 2012. $250 per share. Don’t be greedy. Diversify. Learn to take your profit. Nuff said.

      1. Still getting dividends. And the capital gains I would have to pay would be more than the cost of my house. And it it a big, 100 year old house in the best neighborhood in town!

  2. “We’ve reached the conclusion that, if the current low holds, Apple should see a dramatic rally at some point over the next 10 weeks.”

    Only if Apple fixes their supply problems. EU availability of several models of iMac going from 4 weeks max to 6 weeks max is moving in the WRONG direction.

    1. I personally don’t see what makes Apple an $800 stock or a $400 stock because I don’t understand how values are set on stocks. As near as I can tell Netflix shouldn’t be a $200 stock with a P/E of 600 nor should Amazon be a $300 stock with a P/E of 3300+. I’m just saying let’s have some reasonable standards in place. No one should be able to look into the future and say one company will fail and another will not and set a current share price based on that prediction. No one can predict the future.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.