An Apple A Day Keeps The Bear Market Away

An Apple a day keeps Bearish investors at bay and the road to riches paved by high tech gold. This revenue gold is being minted by technology behemoths and cloud princes that have proven to be consistent growers in good times and bad. The leadership in this market is narrow during a COVID impaired economy that negatively affects the physical service sector while enhancing virtual segments connected to the stay at home economy. Mega cap tech is positively diverging from the broader indices more than ever, making it easy to pinpoint where Bull market investors are placing their bets: Apple, Amazon, and Microsoft to name the three biggest.

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For several years the unthinkable $1 Trillion market cap value for a single company had become a horse race that Apple won by a nose over Amazon in 2018. At one point last year, Apple, Amazon, and Microsoft were all testing the $1 Trillion market value barrier with a frequent jockeying for the lead. As investors contemplated the distant $2 Trillion milestone this year, it looked like Amazon might win the crown when it more than doubled from its March lows. However, last week's blowout numbers firmly launched Apple back into the lead when its prices gapped higher and reached the important technical swing target of 443. This level is just 4% below the $2 Trillion milestone. The broader stock market is unlikely to take a serious hit to valuations as long as tech giants like Apple are running to record highs almost weekly. While we see a long runway for rapid growth by the largest company on the planet, Apple has now hit technical targets near term that should slow its ascent. With significant resistance 4 to 12% above current values, it may require a faster pace by the other Trillion $ horses (Microsoft, Amazon, and Google) to keep the markets racing higher this year. Longer term, Apple has plenty of market share to usurp with an increasingly powerful magnet of a dominant ecosystem that will compel customers to switch brands since no other company can compete with such a large family of high-quality products. There may be products of similar quality as a stand-alone, but none can sync a whole family of products that play well together. Apple’s $2 Trillion valuation near 460 and even a $500 stock price are possible near term, but the rising tide of Apple may son slow for the next few months making it difficult to sustain lifting all boats in the stock market. When Apple’s ready to catch its breath and take a step back to collect its troops, the broader market will be eager to join in the correction.

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Disclaimer: This report may contain information on investments that are high risk and have substantial risk of principal loss. It is for informational purposes only. Statements in this communication ...

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