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TheStreet Open House

Apple Upgraded as Adobe, Oracle Prepare Earnings Reports

NEW YORK ( TheStreet) -- We ended last week with Apple (AAPL) ($464.90) testing its 50-day and 200-day simple moving averages converged at $464.93 and $462.16 and with an upgrade to buy from hold according to www.ValuEngine.com.

As we continue to focus on Apple, which clearly remains one of the benchmark stocks in the computer and technology sector, we also focus on earnings reports from three other stocks in this sector, plus earnings from one stock in the business services sector and another in the industrial products sector.

The computer and technology sector is 25.4% overvalued with the business services sector 20.2% overvalued and the industrial products sector 21.4% overvalued.

Apple is a key component of the Nasdaq, which led the major averages higher last week with the Nasdaq setting a new multi-year high at 3731.84 on Sept. 12. When Apple declined to the 50-day and 200-day SMAs the Nasdaq stalled while the other four major equity averages continued higher.

At the Aug. 19 high at 513.74, Apple was rated hold and was testing my annual risky level at $510.64 and the 38.2% Fibonacci Retracement level of the decline from above $700 to below $400. This retracement level is $507.82. My annual value level remains $421.05 with an annual risky level at $510.64. Apple now has a buy rating with its 50-day SMA crossing above its 200-day SMA, which is a technical positive for the stock.

Chart Courtesy of Thomson/Reuters

The decline in Apple shares prevented the Nasdaq from having a weekly close above annual and monthly risky levels at 3759 and 3772, which delays calling for new all-time highs. The question today is whether or not the Nasdaq can pop above these risky levels on the euphoria that Larry Summers will not be the next Federal Reserve chief. A gain of 37 points for the Nasdaq gets it up to 3759.

My quarterly and annual value levels remain at 14,288/12,696 Dow Industrials, 1525.6 / 1348.3 S&P 500, 3284 / 2806 Nasdaq, 5348 / 5469 Dow transports, and 863.05 / 860.25 / 809.54 Russell 2000 with monthly and semiannual risky levels remain 16,336/16,490 Dow Industrials, 1766.8/1743.5 S&P 500, 3772/3759 Nasdaq, 7061/7104 Dow transports and 1093.07/1089.42 Russell 2000.

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