“In September 2012, Apple closed at a record high of $702.10; the stock proceeded to fall to below $400 per share and more than 40%, even as top Wall Street analysts were calling for a run to $1000,” Douglas Ehrman writes for Seeking Alpha. “Monday, Apple shares closed at $100.53 per share, making it the all-time highest close ever on a split-adjusted basis. The obvious question is where do we go from here and is Apple set for another precipitous fall?”
“Unlike the last time Apple was in this position, there are a collection of factors that I believe make the stock poised to climb significantly higher,” Ehrman writes. “The last time Apple shares were at all-time highs, they were trading at over $700 per share. This creates a significant mental barrier, particularly for a stock that has a greater retail following than most in its peer group. The recent 7-for-1 split, which, coupled with a strong earnings release, started the current run, has had the desired impact. While the stock is at a historic split-adjusted high, Apple shares above $100 per share does not seem that unusual.”
Ehrman writes, “The real story of why Apple has the potential to climb to new heights is the upcoming release of the iPhone 6, as well as the potential introduction of a new product line in the iWatch. Unlike the iPhone 5, the iPhone 6 is expected to give consumers a major upgrade in the one area that Apple has been long criticized: screen size.”
Read more in the full article here.