AAPLTalk, 07/30/13 Market Close: Pretty Decent Day, Potential Uptrend Channel

aapl-daily-073013close

Nothing much to add today, so just a quick update.  AAPL cooled off later in the day, and ended green right about in the middle of its intraday range.

It seems the price action is still net bullish.  A $1.50 or so gap up that held (though it’s hard to trust they’ll hold after so many weeks of downtrend), a second day closing above the upper daily BB, better volume than yesterday (if still relatively light), clear relative strength vs. the indecisive broader markets (except for the NASDAQ, which was up about 50 basis points).  AAPL also cleared $450 and temporarily traded a nickel higher than the previous downtrend “lower high” of 457.10.  Well, it’s a start, and at least there’s a new intraday high point of reference.

I’m not entirely sure why the lower daily BB decided to flatten out, but I’ll keep watching that.

The possible warning signs of AAPL being due for some retrace haven’t gone away.  AAPL’s even further away from the upper BB boundary now and it’s still overbought.  Then again, bullish price action can result in things like that.

A potential parallel-ish channel my be forming.  I’ve marked it with darker green lines.  The upper boundary is around 458-ish by Wednesday close, so I’m adding that to my nearby points of reference (none of which are exact, I just don’t feel like adding “ish” to each one):  440 / 446-448ish / 450 / 453 / 457-58ish / 460 / 465 / 470.

Lots of data points ahead, along with Fed Wednesday.  Something tells me the rest of the week could be better for measuring AAPL’s strength, but as of this moment, AAPL’s still looking much better than it has in a long time.

AAPLTalk, 07/29/13 Market Close and Micro Roadmap for the Week: Going Against the Trend

At least two very interesting things happened today in my humble opinion.  Here’s first and foremost to me:

aapl-daily-072913close-1

Remember that green trendline, which has contained AAPL’s downtrend since forever, I mean Jan-Feb of this year?  Some measure it a bit differently, but to my eyes, AAPL FINALLY broke above it.  Not by more than a couple points, but it still did, and more importantly AAPL held above that invisible barrier pretty much all day, after early-in-the-morning prices of 440, then cresting 446 and not looking back.

The other very interesting thing was AAPL breaking above, and closing above the daily upper BB.

Why?  Well, when did that last happen?  Go load up your favorite chart and look back a few weeks if you like.  I’ll wait.

Yup…September 19, 2012.  Two days before the iPhone 5 launch.

Now might be a good time to quickly go over some of the “bad” aspects of today’s action.  Volume remains pitiful (by AAPL standards) at about 8.7M shares.  Some bearish divergences are apparently showing up on shorter timeframes like the hourly.  AAPL got rejected (mildly) at 450.  And AAPL is showing overbought on Fast Stochastics, along with that breaking the upper BB, which has had a history of forcefully “controlling” AAPL’s price action this (presently-concluded) downtrend.

On the other hand, MACD-h on the daily is just fine, there weren’t any troublesome gap ups today, and the combination of going back to overbought AND breaking the upper BB AND the last downtrend-top-based trendline for the first time in months is really only possible due to…well…bullish price action.

If I were to zoom in only on very recent price action, I’d see two signs of potential pullback/retrace.  And they’re definitely in play as caution signals.

Then again, I’m not sure the “perfect setup” exists, since some signal on some timeframe is bound to go against your trading thesis, bullish, bearish or neutral.  And price action seems more constructive than it’s been in months, even as it might look a bit overheated short-term.

Anyway, on the downside I’m personally looking at trendline/micro support around 446; and then 440ish/434ish support levels.  Above, there’s an action area around 450-470 where anything can happen.  Breaking it down, there’s the prior countertrend “lower highs” of 454ish and 457ish from June 4 and May 31 respectively; and then two big tests at the overall green line downtrend lower highs of 465ish (May 7-8) and 470 (March 25) before making a run at the SMA-200, which is currently a little below 480.

We’ll see where we’re at in the days ahead.  As always, who knows what’ll happen.  Interpret your own readings as best you can, and good luck.

“Don’t Scare Me Like That”: Mansfield’s no longer a SVP, but he’s still at Apple

Credit to Reuters’ Poormina Gupta, apparently the first to break the news as to exactly why Mansfield’s bio was unceremoniously dropped from Apple’s executive bios page.

Did you know there’s programs that check for changes like this, by the way?  I didn’t until today.

Mansfield certainly seems capable of leading teams to create quality hardware if recent Macs and iOS devices are any indication.  So it’s good to hear he’s still with the company, though hopefully Monday will bring slightly more detail than “working on special projects reporting to Cook”.  Not counting on it, but it would be nice – it’s a little more “worrisome” when an SVP gets “demoted” vs. when a former Apple employee returns to the company in that “special projects” role (Paul Deneve).

“Samsung vs. Apple Operating Profit Wars” Fact-Checked

As if anyone needed to be any more skeptical of tech media/bloggers. Or Strategy Analytics for that matter.

As illustrated by Daniel Eran Dilger (and helpfully further publicized by Fortune’s Philip Elmer-Dewitt), it turns out that inferences have nothing on facts (and much stronger inferences that may as well be fact, such as iPhone GM being a bit higher than the rest of Apple’s revenue base).

Could Samsung successfully continue mix-shifting to higher-margin handsets like the S4 and increase profitability further with unit sales growth? Sure! But, well, Apple can still grow the iPhone business too (even as I wonder if an “intentional” shift to address the lower-priced smartphone market may be underway in the coming years).

“Profit Wars” is far from over.

The Loop’s Jim Dalrymple (aka “The Beard”) Addresses an Apple Rumor

For the first time in a while. And it’s a “nope”. Given The Beard’s perfect record – consider that rumor 100% debunked.

Why wasn’t WS all that upset, if they were even paying attention at all? Well, Sep. 6 is still a bit early for Fall. And an actual launch on Sep. 6 implies pre-ordering 10 days or so before the launch, which implies an Apple media event some days before that, which implies a media invite at least a few days to a week before that. Before you know it, we’re in mid-August or so with Apple media invite news.

Then there’s that whole “iOS 7 needs to get done and released a few days before the new iPhones” deal, too.

So maybe Dalrymple can “yep” more solid intel that might put the actual first-stage launch of the new iPhones more like mid/late September.

When Inferences Turn Into Fact

“The Samsung Galaxy S4 has sold well, but analysts worry the market might be saturated.”

Now the first half of that statement is very likely true. Samsung’s impressive (yet “disappointing”) YOY profit increase is most likely attributable in large part to a richer overall revenue mix of higher-margin smartphones, of which the S4 (series) is the clear flagship. But, y’know, Samsung’s been about as specific about Galaxy S4 unit sales lately as Amazon’s been with their Kindle/Kindle Fire sales.

What’s that? Amazon doesn’t give out Kindle unit sales? Exactly.

I guess reports of shipments (vs. company-supplied data on unit sales, sell-in, sell-through or otherwise) will have to do. And hey, 20 million shipped is a milestone of some kind, even if “shipped” doesn’t necessarily mean actually sold. A quick press release to mark the occasion would be fine as official company data…why stop at a media report of a Samsung executive confirming…another…media report?

Alas, _actual_ data on the S4 is quitedifficult to quantify without an apples-to-apples comparison. ¹ But hey, let’s give the multi-national $180B+ mega-conglomerate (and that’s just the electronics arm) the benefit of the doubt, shall we?

¹ Maybe a couple of you Apple/Samsung observers noticed what I did there.

Betting on Yourself: Apple “Expects the Stock Price to Climb”? Or Maybe Apple Just Knows a Good Deal When It Sees One

http://9to5mac.com/2013/07/25/apples-accelerated-aapl-stock-repurchasing-suggests-it-expects-the-stock-price-to-climb/

Brief commentary aside (and Ben Lovejoy’s point on Apple being bullish on share price is well-taken), the speed (quantity) of Apple’s buyback activity so far is really something else. As most of you recall, Apple has authorization to buy back $50B in shares. If Apple has the go-ahead to buy back over 100M shares (assuming an average per-share price of $500 or less), for it to have bought back over 35M shares so far (net diluted share reduction) makes one wonder exactly how many shares Apple will buy from say, mid-2014 until the end of calendar 2015. Unless Oppenheimer’s mention of “end of fiscal 2014” wasn’t an accident. At this point I wouldn’t be surprised if Apple bought back over 50M, maybe even 60M shares by the end of September (although they wouldn’t necessarily be all deducted against net diluted share count as of the end of Apple’s fiscal 2013).

And since I’m on the topic of buybacks, a quick note on Apple’s “cash” balance. ¹  Oppenheimer mentioned an imposing $106B overseas (i.e. can’t be used for buybacks), something like $144B in total cash as of the end of fiscal Q2, and a net increase in cash of close to $2B as of the end of fiscal Q3, against about $17B in bond financing debt.

Will Apple do another round of bond financing, will it use some of the $40B or so available domestically, or a combination of both? We’ll see.

Also somewhat interesting: The more quickly Apple meets its $50B quota (of course, it can always buy back the remainder of its allotment more slowly over the next several quarters), the more quickly Apple also reduces its total “dividend obligations”). So if the cash situation allows it, Apple can not only buy back 10% or more of the company relatively quickly, it can also cut dividend payments by the same amount, saving $3.05/share/quarter (or $12.20/yr at current rates) on all retired shares. Not a bad way to eventually save a billion or so a year…or, put another way, deploy that billion or so saved for any number of other uses. Ironically, given enough time, the dividend savings will “finance” the current buyback.

But maybe that’s a subject for another post…

¹ I’m going with Oppenheimer’s “version” of cash here. And if he says it’s cash, I’m assuming he means those assets that also be readily converted to cash (such as those securities holdings) if need be.

Pardon Me While I Meta-Moderate This a Bit

Not like he cares or even notices, but no, I’m not picking on Mr. Frommer, his is just one of the first earnings articles I’ve read.

http://techcrunch.com/2013/07/23/apples-no-growth-q3-2013-in-charts/

You mean…”Apple’s Transitional, Lower-ASP-Revenue Mix, Seasonality-Disrupted-iPad Q3 2013 In Charts”?

Hmm…not _entirely_ there…but a fair bit more accurate than the headline, at least.

No question that revenues are kinda flat.  No question that earnings are down year over year.  No question Apple’s in a “rough patch” as far as growing the business.  On the other hand, Apple is making absolutely all the right moves in this transitional period…considering its tremendous product logjams from last year…impossible gross margin compares from the prior year…and supertanker-speed-seeming turns towards better financial results clarity juxtaposed against the substantial change in guidance methodology from just six months ago.

If that sounds a bit like “damning with faint praise”…that’s because it is a bit like that, in fact.