APPLE, Daily
Apple, an American company founded in the 1970s, represents itself as a great example of the American dream with many success stories. The company has at least two key months every year, usually September and March. Last September, everyone was waiting for the new iPhone, which is the company’s main product and stock mover; however, the company could prove that its services can also bring in high income for them.
On October 23, 2020, the new iPhone with 5G support was introduced, and even though at the beginning the market reaction was not overly positive, in the time since the 14th-generation iPhones, which have improved cameras, speedier processors and a new design, have started to convince iPhone lovers that they are different than previous models and not simply repeating the same cycle that has been seen since the iPhone 6.
The highest share price of $145, seen on 25 January, marked a 24.7% gain since the October product announcement, and even with the correction that started on the same day, the Apple share price at the current level ($125.17) shows a 7.6% gain. The question is that with the success of the iPhone 12 reaction, what will be the next big growth driver for Apple stock for 2021?
In the latest earning report on January 27, results were much better than expected. According to company reports, EPS on sales of $111.44B was $1.68. On a year-over-year basis, Apple earnings rose 34% while sales climbed 21%. In the December quarter, iPhone revenue gained 17% by rising to $65.6B, supported by the launch of the iPhone 12 series. However, the best sales were on iPad tablets with a 41% gain to $8.4. In short, Revenue was up 21% and EPS up 35% to new records. iPhones, Wearables, and Services set new revenue records.(1) We are now in March and waiting for new product announcements for new iPad Pro tablets, new AirPods wireless earbuds, and AirTags tracking devices, which could be the next growth potential of the stock price in the market.
Apple’s Wearables, Home and Accessories unit (Apple Watch, AirPods wireless earbuds, and Beats headphones) with a 30% gain had a $13B revenue for the company in the December quarter. (2)
On the other hand, according to reports that have been circulating for what seems years now, the company is trying to get significantly involved in the burgeoning Electric Vehicle (EV) market, which could be another market mover for them. Hyundai, Nissan and a number of other automakers have been mentioned as potential partners.
Apple’s spring event for the year 2021 is expected to be online due to COVID-19 limits; however, the exact date has not yet been revealed.
Technical review – Daily
In the daily chart, the technical indicators are mostly supporting the lower prices, while RSI and MFI, both at 40, confirm the EMA crossing strategy downtrend. PP sits at $126.50, while R1 at $129.40 is more likely to be a key lever for an uptrend, while below the current level, S1 shows at $124.30, and S2 sits at $121.05.
1- https://www.apple.com/newsroom/2021/01/apple-reports-first-quarter-results/
2- https://www.apple.com/newsroom/2021/01/apple-reports-first-quarter-results/
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Ahura Chalki
Regional Market Analyst
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