NEW YORK ( TheStreet) -- What's happened to Apple (AAPL - Get Report) over the last two trading days is significant.
Apple announced a Sept. 10 event at the opportune time to thwart technical weakness related to a post-dividend selloff.
Because of this product announcement leak to
All Things D
, August is tracking much better than the May dividend precedent and a snowball effect is occurring on the heels of a strong post-earnings rally.
When a stock surges against the odds of expected technical weakness, it sends a strong signal to traders that a breakout is under way. Under typical circumstances of the last 10 months, Apple was expected to drop to 430 this week.
Instead, the stock was up 13 on Monday and is up 7 on Tuesday. The August run to $500 is tracking ahead of schedule.
In the Wild West of the blogosphere, it can be difficult to identify which news is market-moving and which news is irrelevant. For Apple, only two fundamental news items matter. The first is nicely summed up by
in an article titled "Low-Cost iPhone Predicted to Boost Both Apple's Margins & International Sales."
We heard this same analysis from Morgan Stanley's Katy Huberty three months ago; now we're hearing it from ISI's Brian Marshall.
Marshall speculates that the new iPhone 5C will have 40% margins, which compare favorably to the June quarter tally of an overall gross margin of 36.9%. He believes the 5C will prove crucial to Apple as it improves overall margins and drives market share gains.
China Mobile has 740 million subscribers and Japan's NTT DoCoMo has 62 million subscribers, and neither carrier currently offers the iPhone. That should change with the 5C.
What is Marshall's price target on Apple?
Same as ours: $600.
The next time someone tries to tell you that the iPhone 5C is bad for Apple, just tell them to look at the stock action from September 2012 to September 2013, when Apple wasn't offering the 5C. Obviously Wall Street wants a low-cost option in the iPhone family.