Trader identifies key support levels after the sale
One of the best performing Dow stocks this year could continue its course.
Apple shares rose 14% in 2020, and Bank of America is betting on more upside. The company raised its price target to a high of $ 390 on Thursday on a planned 5G upgrade cycle and 20% hardware growth.
“5G is the buzzword, and at the end of the day, I love how Apple has diversified its revenue streams,” Blue Line Capital chairman Bill Baruch said on Thursday on “Trading Nation”. CNBC. “It’s a company that sells phones. You’re going to have to switch to this 5G technology over the next 18 months. It will rejuvenate that flow.”
The charts also suggest that an Apple drop – as seen over the past few days – should be limited, he said.
“It broke through last year’s high, a big resistance level at $ 327. Now that’s support, and overall you also have an uptrend line over the pluses. March low, and for me $ 327 to $ 330 is going to be huge level support, ”he said. “I also want to point out that he didn’t get the death cross, and the fact that the 50-day moving average rejected the move below the 200-day moving average in May – that fueled the rising as it has done in many tech equity countries. “
A death cross – when the 50-day moving average crosses below the 200-day mark – indicates a downward trend reversal. Apple avoided this in early May.
Apple closed Thursday’s session at $ 335.90. A drop to $ 327 implies a 3% drop.
John Petrides, portfolio manager at Tocqueville Asset Management, said tech companies like Apple should continue to be favored by investors.
“It’s hard to see how, as a group, they don’t continue to outperform. With low interest rates, those companies with huge amounts of cash on their balance sheets have almost acted like bond substitutes, bond agents, because you don’t. have to worry about the liquidity of these mega-cap companies, ”Petrides said during the same segment.
Petrides also sees advantages and disadvantages for Apple, fundamentally.
“Apple has its own issues – it will always depend on the next iPhone cycle, and it has to determine if Apple TV Plus is here to stay. And then you should get an edge as we move to a contactless cashless company at cause of Covid-19. You should see a slight increase in Apple Pay over time, “said Petrides.
Apple is Dow’s second best performer this year, behind Microsoft. It is up 1% this week.