Apple: Still Riding The AI Revolution
Apple is one of the biggest companies in the world and one of the tech sector’s biggest influencers. It’s perhaps best known as the manufacturer of iPhones, but the development of Apple Intelligence within its devices also positions it as a major player in the AI revolution.
While the company delivered record revenue for the September quarter1, the market response was a little more tepid. The slow rollout of Apple Intelligence disappointed some investors who were hoping that its implementation would more strongly drive new iPhone sales. That resulted in a brief pullback in the stock’s price, but it has since regained its momentum.
source: StockCharts
Apple has been trading above its 200-day moving average since May, but its latest rally has pushed it above all of its major shorter-term moving averages as well. The 20-day moving average has served as a strong support level over the past month and the stock has continued to move higher as it broke through the double top around $237.
The MACD indicator2 still indicates positive momentum for the stock, although it has eased from its peak level of roughly a month ago. The RSI (or relative strength index), which, according to Investopedia, “measures the speed and magnitude of a security's recent price changes to detect overbought or oversold conditions in the price of that security”, has dipped back below the 70 level, which chartists would generally consider above that mark to be overbought conditions. We feel that Apple is still exhibiting positive momentum, but it may be showing signs of easing.
The Chande Trend Meter, another momentum indicator which, according to StockCharts, is “based on several different technical indicators covering six different timeframes”, is near multi-years highs. This may be indicating stronger momentum right now than what is being suggested from the previous two measures.
After moving sideways for much of July through October, Apple was able to re-establish its upward trend after the magnificent 7 stocks (consisting of Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta Platforms and Tesla) began outperforming the S&P 500. We feel that Apple is well-positioned to take advantage of the AI revolution, while sales of iPhones and other devices serve as the core revenue driver.
If you’re looking for an easy way to add enhanced Apple exposure to your portfolio, consider the GraniteShares 2x Long AAPL Daily ETF (AAPB).
1source: Apple earnings release
2According to Investopedia, the MACD (or moving average convergence/divergence) indicator is “a technical indicator to help investors identify price trends, measure trend momentum, and identify entry points for buying or selling.”
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