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Apple (AAPL) appears to have completed a mini-3 wave down move and thus, triggered a Relative Strength Breakout Buy signal in Chaikin Analytics stock research on Thursday, January 8, 2015. The Chaikin Power Gauge stock rating turned bullish as AAPL closed above its long-term moving average trend line. Demand for the iPhone 6 continues strong, with sales in China adding additional revenue. The strength in Chinese demand for iPhone 6 is reflected in slower growth for Chinese smartphone seller Xiaomi.
App store revenues, an often overlooked component of the AAPL revenue story, are surging according to a company press release which detailed record first week of January app store purchases of half a billion dollars. The freemium business model that leads to in-app purchases appears to be working big time for Apple.
Another source of revenue growth for Apple, mobile commerce, is ready to take off as BI Intelligence reports that a number of large retailers have already ramped up their technology platforms to accept payments from Apple Pay.
These additional revenue streams are important as the 1st quarter earnings due to be released after the close on January 27th will reflect the heaviest holiday-related demand for the new iPhone 6. Expectations are for consensus estimates at $2.54 per share. AAPL has bested analyst estimates in each of the past 7 quarters and typically trades higher after earnings are released.
A number of Wall Street brokerage firms have reiterated their buy recommendations on Apple and raised their price targets as well. Cantor Fitzgerald analyst Brian White tracks a basket of Taiwanese suppliers of parts to AAPL and notes that their December quarterly results were strong, suggesting that Apple sees no let up in demand for its iPhones.
With price targets now in the $143 - $151 range for AAPL the stock looks poised to challenge its recent all-time high of $119.75. With a bumpy start for the broad market in 2015, there should be ample opportunities to buy Apple on short-term dips ahead of the end of month earnings report. Skyworks (SWKS), an important chip supplier for the iPhone 6 reports earnings on Wednesday this week (January 14, 2015) after the close and should provide a tip off to the strength of AAPL’s 1st quarter earnings,
Look for a dip before the SWKS’ earnings report on January 14th to buy AAPL.
Apple has a bullish Chaikin Power Gauge rating which is driven by Industry Group strength, a strong earnings trend and projected earnings growth, positive trends in analyst estimates revisions, and opinions which have led to higher price targets for AAPL.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
