APPL stock outlook: Time to sell and watch for VWAP reaction at $205

Apple Inc. (AAPL) has long been a shining star in the stock market, winning the hearts of investors and traders alike. But even the best stocks need a breather, and recent price action hints that now might be the time to shift gears. Don’t worry—this doesn’t mean giving up on AAPL. It’s about being smart, taking some chips off the table, and watching for that perfect moment to jump back in. Let’s dive into why selling a portion of your AAPL holdings and waiting for a potential reaction at the $205 VWAP could be a solid move. Further lower, we have the $200 round number where a lot of liquadity is waiting with pre-set and will-be-set orders by traders, should the stock price declines to that zone. And we have the 196’ish level which is the top of the previous long consolidation zone. Dip seekers may want to cast a net of buys at $190 to $206 for patient stock accumilation and dip buying, as they average out an entry price at apx $200 or even slightly lower.

Why sell Apple stocks or take partial profits on AAPL now?

If you’ve been riding AAPL’s upward trend, congrats—you’ve earned it. But let’s not ignore the signs pointing to consolidation after a big run. For over a year, AAPL has bounced within a 17% range, creating a pretty clear trading zone. Resistance near $235 has once again triggered some profit-taking, adding to the current dip. This isn’t unusual; it’s actually quite healthy for a stock to pause and recalibrate. So, taking partial profits now could protect some gains and free up capital for a potential buy at a more attractive price.

Key VWAP level at $205 – the sweet spot to watch

Now, here’s where things get interesting. The volume-weighted average price (VWAP) near $205 has acted as a solid support in past consolidations. It’s a place where buyers often return to show their strength. If AAPL does drift down to this level, it’s time to pay attention. A bounce here could signal that it’s game on for another climb, while a break below might mean more downside is coming. Either way, $205 is the line in the sand.

What to keep an eye on

1. Price reaction at $205: If AAPL makes its way to $205, how it reacts could be a big clue. A strong bounce could mean buyers are stepping up, setting the stage for a rebound. But if it breaks below this level with conviction, it might be wise to hold off before buying back in.

2. Volume and momentum: Watch the volume as AAPL approaches $205. Heavy volume that pushes the stock back up can be a sign of renewed buying interest. But if volume surges and the price keeps slipping, that’s a caution flag.

3. Overall market sentiment: Let’s not forget that AAPL doesn’t move in a vacuum. Keep an eye on the tech sector and the broader market. A strong tech rally could support AAPL, while market-wide jitters might make any dip more pronounced.

I am a stubborn holder of Apple stock and you can’t time the market.

You can’t time the market but you can mitigate risk by lowering your position size. Here’s the comforting part—AAPL remains a stellar long-term pick. Taking partial profits now isn’t about losing faith; it’s about being strategic. Waiting for the stock to approach $205 and observing its behavior there can set you up for an even better re-entry point. Be prepared for some volatility and be ready to act based on what unfolds at this pivotal level.

In the end, stepping back to reassess and possibly buy back at a lower price can be the smart, patient move. The VWAP’s history as a support level makes it the perfect spot for a potential showdown. Whether it holds or breaks will determine the next chapter for AAPL—and you’ll be ready.

AAPL stock news: Quick takeaways you need to know

Last Updated: November 03, 2024

• Apple’s new AI Push to offset iPhone sales
  Apple is rolling out new AI products to help cushion potential drops in iPhone sales. This move showcases their commitment to staying innovative and diversifying their tech lineup. Analysts are optimistic, suggesting this could boost market sentiment and strengthen Apple’s long-term growth prospects, even amid economic uncertainties.
• Berkshire Hathaway trims Apple stake
  Warren Buffett’s Berkshire Hathaway reduced its Apple holdings significantly in Q4 2022, cutting its position by over 33%, equivalent to $16 billion. Despite this, Berkshire still holds $54.7 billion worth of AAPL shares, signaling cautious confidence. The strategic shift raised eyebrows but also highlights Buffett’s rebalancing strategy to mitigate risk while maintaining a significant stake.
• Cash pile grows at Berkshire
  Following the reduction in its Apple stake, Berkshire’s cash reserves swelled to $131 billion. This suggests that Buffett is gearing up for potential acquisitions or new investments. Traders should watch closely for Buffett’s next moves, as these could impact both Apple’s stock and broader market trends.
• Bottom line for Apple investors
  While Berkshire’s sell-off might cause short-term concern, Apple’s diversification into AI and sustained tech dominance keep it a strong long-term pick. Stay vigilant and consider taking partial profits to mitigate risk, especially as new buying opportunities could emerge if AAPL dips further.

AAPL stock valuation: Key points at a glance

• Strong P/FCF ratio: AAPL’s Price-to-Free Cash Flow ratio of 30.73 highlights a solid cash position, appealing for long-term investors due to its potential for reinvestment and shareholder returns.
• Robust market cap: With a market capitalization of $3.34 trillion, Apple’s valuation underscores its strong financial standing and growth potential, supported by projected EPS growth of 21.31% this year and 12.14% next year.
• Forward P/E advantage: Apple’s Forward P/E of 26.95, lower than its current P/E of 36.72, suggests anticipated earnings growth, indicating shares may be undervalued.
• Analyst sentiment: Despite recent downgrades by some firms, the general consensus remains positive, with buy and overweight ratings from major analysts like JP Morgan and Morgan Stanley, reflecting confidence in Apple’s outlook.

AAPL stock analyst recommendations:

• Sure, Jefferies and KeyBanc Capital Markets recently handed out some downgrades, but don’t hit the panic button just yet—most analysts are still quite optimistic. Heavy hitters like JP Morgan and Morgan Stanley are keeping the faith with repeated buy and overweight ratings, suggesting that Apple’s stock isn’t losing its shine.
• Several firms, including Monness Crespi & Hardt and JP Morgan, have been bumping up their price targets significantly. Translation? They’re seeing big potential for Apple’s performance in the market. Investors should keep an eye on these bold moves—they’re like breadcrumbs leading to confidence in Apple’s future growth.
• The wave of upgrades and renewed buy ratings from players like Loop Capital and DA Davidson, who’ve upped their price targets by a good margin, shows analysts are doubling down on their positive outlook. It’s a trend that screams “confidence,” perfectly in line with searches for ‘AAPL analyst recommendation’ and reinforcing a bullish vibe for Apple’s prospects.

AAPL stock insider trading insights:

• Executive sell-offs: CEO Tim Cook and CFO Luca Maestri recently sold shares worth $50 million and $13.4 million, respectively, potentially signaling caution.

• Strategic implications: Continued sales by financial and legal executives, such as the Principal Accounting Officer and General Counsel, could be a cue for investors to review their positions carefully.

Overall, while AAPL remains strong, recent insider activity and valuation metrics call for a balanced, informed approach.

Always sell or buy Apple stock at your own risk only. Visit ForexLive.com for additional, original views for stock investors and traders.

This article was written by Itai Levitan at www.forexlive.com.