Is Apple A Buy?

Apple Inc. AAPL (NASDAQ) is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services. It is considered one of the Big Tech technology companies, alongside Amazon, Google, Microsoft and Facebook. The stock has been rallying over the last few months since the COVID crisis began. Investors and analysts alike are concerned with just how justified this rally was and if it would continue in the future. We’ll be spending some time looking at the technical indicators to help us understand where Apple might be heading, and provide an Apple stock price analysis.

MACD

The Moving Average Convergence (MACD) is a trend momentum indicator that shows the relationship in this case between the 12 day and 26-day moving averages. It is commonly used as a buy or sell signal if the MACD 12 day line (blue) crosses the 26-day signal line (orange), It indicates a bullish buying signal. This is because the shorter 12 day moving average has diverged from the long term moving average and upside momentum is occurring. This has occurred in the above graph with Apple indicating a possible increase in price. However before you can use market insights to better your decision making it’s important first to learn how to trade. Previously we did similar analysis with Beyond Meat in order to best understand where the price might head before the stock skyrocketed to where it is now. Likewise our Boeing stock price analysis yields similar details.

Moving Average

This time a wanted to show you all a new technique called simple moving averages. A classic among economists it averages the price of the stock over the last period of days and displays that against the graph. The idea is that if the price line crosses the moving average line from below its indicating a buy signal.

This is a basic concept and we can improve on it. We can see that the price has penetrated the blue (20 day average) in early April and the red (50 day average) by mid April. In each case indicating buy signals. If we combine the two lines red and blue we can generate a third buy signal. When the shorter period (blue) penetrates the longer period (red) from below a buy signal is formed. We can see this happen right before the start of May. We can further expand on this by adding different day averages and even more averages to the one graph.

With all this said it is always important to remember to diversify your investments to ensure that you are less sustainable to market volatility and rapid market movements. Also if you are new to investing make sure you look into trading with a demo account to practice, more information on that can be found here.

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