NEW YORK (TheStreet) -- There is always a lot of interest in Action Alerts PLUS holding Apple (AAPL - Get Report) . People follow its products, its earnings, its sales in China, its cash hoard, its CEO -- but for me, it has been its inclusion in the Dow Jones Industrial Average and its price action that matter most. The burning question this morning is whether AAPL can rally back to its 52-week high at $134.54.
In this first chart of AAPL, above, we can see upside attempts to break out over $135 -- one in February, another in April and then the last one in July. After these three rally failures, AAPL had a two-month slide which has been followed by a two-month consolidation. The lower panels on this chart show a flat or stable On-Balance-Volume (OBV) line with improving momentum. AAPL has started a new uptrend by moving above the September highs, but can we reclaim the highs of earlier this year?
Point and Figure charts can show breakouts and breakdowns better than other charts in that small jiggles are ignored on this kind of chart. For this chart of AAPL, above, jiggles smaller than $2 are not plotted. AAPL had trouble getting above $116 on this chart until yesterday. Yesterday's new high for the recent move up gives us a breakout entry on the chart at $118 and a breakout price target of $133.
At $133, this gets us in the neighborhood, but at this moment we don't have enough technical evidence to put forth a more bullish price projection. A year-end rally might do it.
Separately, TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate APPLE INC (AAPL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- APPLE INC has improved earnings per share by 38.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, APPLE INC increased its bottom line by earning $9.20 versus $6.43 in the prior year. This year, the market expects an improvement in earnings ($9.85 versus $9.20).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 31.4% when compared to the same quarter one year prior, rising from $8,467.00 million to $11,124.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 25.1%. Since the same quarter one year prior, revenues rose by 22.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: AAPL