The stock continued to move sideways to down to a low of $385.10 into April 19, 2013.
I began to track the bottoming process for Apple and on April 22 wrote
Will Apple Sour a Mixed Earnings Season?
In this post I profiled Apple pre-earnings along with six other key stocks reporting that week. I followed up with
Apple Ripens as Amazon, Starbucks Set to Report
on April 24. Apple's first quarter results included a beat on the revenue line. The earnings reaction was quite volatile. The stock surged from $406.13 to nearly $430.00 in after-hours trading and gave up these gains by 8 p.m. The stock opened at $393.54 on April 24 and rallied to a close of $405.46, ending the day with a key reversal.
On May 6 I wrote
Caterpillar, Apple Ratings Peeled To Hold
. With Apple downgraded to hold from buy the stock was no longer a value play. Apple traded as high as $465.75 into May 7 and has been moving sideways since then, as the bottoming process continues.
Apple is currently rated hold according to ValuEngine with fair value at $502.00, which makes the stock 14.0% undervalued in a market where 71.3% of all stocks are overvalued.
The daily chart for Apple ($431.77) has declining momentum with the stock just below its 50-day simple moving average at $435.06. The 200-day SMA is declining at $515.32. The chart pattern is trying to form an inverse head and shoulders bottom with support around $419.00. My annual pivot is $421.05 with an annual risky level at $510.64.
My conclusion is that if the stock market continues to rally in the second half of 2013, Apple should reach $500 once again. Such would be a return to an annual level at $510.64 as a pivot and on a reversion to the mean of the 200-day simple moving average.
Chart Courtesy of Thomson/Reuters
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.