It seemed that Apple Inc. (NASDAQ:AAPL) stock had become unstoppable again, and it even earned a pair of fresh price target increases. Analysts are hyped up about the iPhone 7 and Samsung’s exploding Note 7, and many see more room for Apple stock to run. However, one chart technician warns that a bearish “harami cross” pattern is emerging.
Apple stock target raised at Pacific Crest, Bernstein
Pacific Crest analyst Andy Hargreaves increased his price target for the shares from $121 to $129 per share and reiterated his Overweight rating. He said that accelerating growth should drive them higher and sees current iPhone expectations as “reasonable.” He also sees room for upside to consensus profit estimates over the next year.
Bernstein analyst Toni Sacconaghi raised his target for Apple Inc. (NASDAQ:AAPL) stock from $125 to $135 and reiterated his Outperform rating in a note to clients on Thursday. The iPhone maker is set to release its September quarter earnings results on October 25 after closing bell, and he expects an in-line fiscal fourth quarter with 45 million iPhone units, $46.3 billion in sales and $1.63 per share in earnings.
Eyes on Apple’s guidance
What he’s actually more interested in is the company’s guidance for the December quarter because it should signal the strength of the iPhone 7 cycle. While other firms have been quick to jump on the early suggestions of strength and possible tailwinds from Samsung’s Note 7 recall, Sacconaghi isn’t ready to jump on the bandwagon yet (or so he says, despite the price target increase).
He forecasts 76.1 million iPhone units in the December quarter, which puts him ahead of consensus at 74.2 million. He looks for the company to guide for sales of $74.5 million to $76.5 million and an implied earnings per share outlook of $3.03 to $3.18 per share. Consensus currently stands at $73.5 billion and $3.11 per share in earnings, and Sacconaghi estimates $77.5 billion in revenues and $3.26 per share in earnings.
Chart technicians duel over Apple stock
Piper Jaffray technical analyst Craig Johnson sees lots of room for Apple Inc. (NASDAQ:AAPL) stock to run even though it just had its longest winning streak since February 2015. He said on CNBC‘s Power Lunch that the shares have “really good support around $90.” He predicts a short-term dip in the shares after they hit $120 but believes they will go back to their May highs within the next few months. He also predicts that there will be some profit taking at that point, sending the shares down a bit, but looking six to 12 months from now, he expects the shares to return to around $130.
However, another chart technician sees a bearish pattern emerging in Apple Inc. (NASDAQ:AAPL) stock. In a post for MarketWatch, Tomi Kilgore warned about a “harami cross” candlestick chart pattern, which suggests an impending short-term downtrend. In Japanese slang, “harami” means “pregnant,” and in candlestick chart patterns, it references a two-day pattern which involves a candle range fully surrounding a second small candle.
“When a harami appears at the extreme of a recent move, it warns of a pregnant pause in the trend,” Kilgore explains. “In Apple’s chart, the fact that the second candle is a ‘doji,’ upgrades the warning to a bearish reversal.”
“Doji” is Japanese for “at the same time,” and in chart patterns, it’s a reference to a time when a stock’s closing price is almost the same as its opening price. So when a doji is in the middle of a pretty wide intra-day range, it suggests “that supply and demand have reached equilibrium.”
After closing at a 10-month high on Wednesday, shares of Apple Inc. (NASDAQ:AAPL) stock are on track to break their seven-day winning streak; they declined by as much as 0.37% to $116.90 during regular trading hours on Thursday.
