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.Follow @SuttmeierThis article is commentary by an independent contributor, separate from TheStreet's regular news coverage.