Wednesday, November 27, 2013

Apple News - $AAPL May Hit $600 In January: Investor Place

In a report today from Sam Collins, the Chief Technical Analyst for Investor Place, Apple Inc. (NASDAQ:AAPL) is predicted to hit $600 as early as January.

Apple's Drop

In the report, Collins notes the numerous times he rated $AAPL as a Sell, beginning on October 9 of 2012, when the stock was trading at $638.

Apple was on a downward trend at the time, which continued through December, when he recommended again that investors sell the tech stock, as it had dropped to $510 per share. On February 28th of this year, he made yet another sell recommendation, giving the stock a target of only $450 to $500 on the downside. At that time, the stock was bringing only $440 per share.

Summer Turnaround

In July, Collins noted that when the stock was near $410 per share, he said, “All shorts should be covered in light of a possible saucer forming. A close above the resistance line at $465 would signal that a long term bottom has finally been established.”

This prediction proved to be true, and in September Collins said, “The bullish saucer formation has continued to develop, a golden cross has formed, and MACD triggered a buy signal. The final bullish signal would be for AAPL to close above the resistance line at $500, but those who wish to take a modest risk could take positions now with a trading target of $570 and a stop-loss at $455. Apple has become a moving target, but a well-placed arrow here could result in a bushel of profits.”

Apple Evens Out

Since September Apple Inc. (NASDAQ:AAPL) has consistently closed above $500 per share. It has remained just under the $540 per share mark, and according to Collins this bodes well for the stock going forward.

He says that a close above the $540 line on a higher volume should boost the stock to the $570 target price set by Investor Place. From there, it is just a short hop to $600, which is the price target he believes Apple will hit in January of 2014.

The chart below illustrates Apple’s movements this year, demonstrating the saucer effect mentioned by Collins.

Whether this prediction will come true remains to be seen. However, in light of Apple’s success with the iPhone 5s and the fact that China Mobile will be launching the iPhone 5s and iPhone 5c in December, a $600 price target does not seem to far out of reach. 

iPhone 5s Production Ramped Up To 500K Units Per Day

Demand for the iPhone 5s has caused Apple supplier Foxconn to boost its production to 500,000 units per day. With the holiday shopping season quickly approaching, the need to reduce the bottlenecks in supplies has increased.

According to reports, the Taiwan based Foxconn has dedicated 100 of its assembly lines strictly to the iPhone 5s. The Zhengzhou factory has more than 300,000 employees working on the iPhone 5s around the clock. 

This big boost in production has helped ease the supply constraints and reduced the amount of time required for shipping a new iPhone. Reports came in during the early stages of release that iPhone 5s customers were waiting as much as 3 weeks to receive their new device. However, that wait time has now been reduced to 3-5 days.

Foxconn has indicated that it is at maximum production for the iPhone 5s, and rumors of Apple’s desire to diversify its supply chain could be leading to the company being unwilling to dedicate more of its employees to the iPhone. If Apple selects other suppliers to produce its products, Foxconn’s share of the pie could get substantially smaller.