Apple Inc. (NASDAQ: AAPL) is currently more than 10% down in the stock market compared to its year-to-date high of $143.16 per share (£101.17 per share) in the last week of January. On CNBC’s “Trading Nation”, however, TradingAnalysis.com founder Todd Gordon said that the upcoming weeks might bring a series of positive catalysts for Apple.
Gordon highlighted four reasons why he thinks it’s a good opportunity to buy Apple stock ahead of its worldwide developers conference scheduled for the first week of June.
1. Technicals
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Apple has been in consolidation, during which the stock printed a five-wave pattern that Gordon sees as a sign that an upside move is in the offing.
“It looks like we could begin to push higher from this consolidation pattern. If we break below $116.20, this pattern is invalid. I would use that as a stop loss. I think the upside, using multiple projections that we use, gets you up just south of $200 in Apple. I think that could happen over the next six to nine months in Apple.”
2. Fundamentals
Fans of Apple Watch, iPad, Mac, and Apple TV are likely to get new operating systems for their devices at the annual developers conference next month. A redesigned MacBook Pro and a much-anticipated iPhone 13 are also rumoured to be launching later this year.
So, the fundamentals, Gordon said, all suggest that Apple is set to go north in the upcoming months. He also recapped Apple’s marketing-beating Q2 results and its 30% share in the market for 5G smartphones to further bolster his thesis.
3. Market dynamics
Gordon acknowledged the recent pullback in tech stocks but said:
“After the initial move up in March of 2021, yields have gone nowhere. They’ve just gone sideways for two months. We might see a push up in interest rates, but I think the market is starting to expect that, and the initial shock of a sharp move up in rates won’t be as drastic as we see it continue to move up.”
4. Sector rotation
Referring to a chart representing SPDR ETFs for financials, materials, discretionary and technology, Gordon said:
“In late April and into May, we saw a very big move into financials and materials. We’re starting to see a really nice move into technology. As we head up into the blue quadrant, this is the improving quadrant. This is the early sign of a possible rotation back in.”
