Apple Chart: $320 to $330 Target (AAPL, MSFT)

Did you think that $275 or $300 was already a very bullish outlook on Apple Inc. (NASDAQ: AAPL) last month or even this month before its earnings report?  After all, shares have already doubled from 52-week lows and the stock is up 200% from the peak of the panic selling over the last 18 months.  As it turns out, the bulls are still alive and well.  Not just in the loyal fans of the company.   There is a noted technician using only the charts who is calling for north of $300 based on the stock chart’s energy bands.

Our technical analysis affiliate is Adam Hewison of INO, and Adam is using the same sort of energy bands analysis in a very short audio-video as he used for gold under $900 to over $1,200 and the similarities are very obvious there.  Hewison’s new call: $320.00 to $330.00.

The good news is that if Hewison is wrong, our own independent chart analysis shows limited downside based on today’s gap up and closing bell prices.  We are not yet going to try to out-bull the biggest bulls, but an independent chart analysis here (eliminating any hype or fanfare in Apple) gives Apple strong support at less than 10% downside in the near-term.

We would note one issue, something that has been a factor for Microsoft Corporation (NASDAQ: MSFT) for years.  Good news in mega-cap stocks eventually starts to require more and more real money by real supply and real demand in the shares to push the stock higher.

Apple closed up 5.98% at $259.22 on over 34 million shares.  The registered high is now $260.25 on the 52-week range, but we’d note that Apple shares were trading north of $264.00 last night after the pre-earnings halt was lifted.  The opening bell price today was listed as $258.26.

The highest official street target on Apple going into earnings was $325.00 per share out of the Thomson Reuters database of targets we could see.

As our own Douglas McIntyre noted today, Apple is prepared to pass Microsoft as the second most valuable company in the U.S.  You can track that exact market cap relationship all day throughout the trading day on our own proprietary Real-Time 500 feature that tracks the 500 largest companies by market cap on a live basis.

There is another interesting event which is easy to understand for options writers but may sound odd for individuals who do not use options.  The options were so expensive going into earnings that we covered writing a $250.00 straddle at OptionsZone.com on Monday.  The premium was enough that the bet is that Apple would not go too far above or below the $250 strike price AND more likely that the volatility would compress after earnings.  Even with the stock having risen almost 6% today, betting against the volatility as an options writer.  That $19.00+ seen on Friday was $18.80 on Monday.  The $250 went out today at $12.80 on the CALL and $3.25 on the PUT, leaving a one-day exit price of $16.05 or an implied profit of $2.75 for the straddle.

As far as when the $320 to $330 gets hit, that is not expected to come tomorrow.  Apple’s market cap is $235 billion as is.

JON C. OGG