Apple $Apple(AAPL)$became the world's first$3 trillion company for a brief time during intraday trading on Jan 3 this year. Due to the bear market in 2022, Apple has fallen to a 52-week low of $129.04 but has recovered most ofits losses in the last 2 months, and now is valued at $2.77 trillion market cap. That's just another 8.3% to the $3 trillion market cap. It is now 6.3% away from its 52-week and all time high of $182.94.
AAPL YTD -5.44%
Recent news have been quite bullish for Apple, as it is just about a month away from iPhoneseason, where it is rumoured that Apple askedits suppliers to increase production for its next iPhone, and the iPhone 14 is expected to seeas much as 15% increase in prices. Some analysts have also said that Apple may get into the digital advertising business as its next big thing to boost sales.
Charts say it has limited upside
From a charting perspective, there might be some indicators that Apple is due for a short term correction.
Apple Daily Chart (2 gaps to be filled)
Apple Weekly Chart with 50 period MA
The daily chart shows that Apple left 2 gaps when it gapped up Aug 10 and Jul 29. Gaps are created when the opening price differs greatlyfrom the previous days close, and it causes inefficiencies in the stock, and the price action will typically attempt to fill the gaps it left behind, although it is not a must to fill those gaps.Currently those gaps are between $164.92 to $167.68 and $157.35 to $161.24.
The weekly chart shows an interesting trend that when ever the price action moves too far away from the 50 period moving average, it tends to pull back toward that 50 MA and find support, although that support failed in the firsthalf of 2022. The stochastic indicators also show that it is getting into the over bought range and could remain there for sometime beforemaking a correction.
Apple 3 year Price to Earning (trailing twelve months)
Apple's current Price to Earnings ratio sits around 28.5x earnings, which is still quite far from its record high 40.7x in Sep 2020.
Apple 3 year Price to Cash Flow (TTM)
Current price to cash flow is at 23.4 times cash flow, which is getting close to its record 28.6x in Sep 2020.
Apple 3 year price to sales (TTM)
Apple's current price to sales comes in at 7.25, and getting close to highs of 8.6 in Sep 2020. An interesting trend in the price to sales shows that whenever Apple crossed the 8.0x price to sales, it to pull back towards 7.0x and managed to find support.
To buy or not to buy?
From the analysis, it shows that the current price is not a buy. Apple will be good to hold if you bought it at a cheaper price earlier this year.
As this is a mid term election year, data has shown that the S&P 500 and the market tends to not perform well from late August to mid October. It would be highly recommended to wait for pull backs during this period to attempt to accumulate Apple shares if you love the fruitcompany.
S&P 500 performance in mid term years vs all other years
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