During the recent trading sessions stock of Apple Inc. (NASDAQ:AAPL) was gathering the crowd in the stock market. Analysts often use price and volume data to predict future stock performance. In the case of AAPL, the chart has some interesting things to say about where the stock might be headed.How has the stock performed recently?
Apple Inc. (NASDAQ:AAPL) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of AAPL has decreased -8.12%. Shares are now up over the past year, outperforming the broad market by -100% and outperformed a peer group of similar companies by 781%. After the latest session, which saw the stock close at a price of $162.71, AAPL sits below its 52-week high.Momentum indicators
Of course, these surface-level price movements don’t tell us much about the direction that AAPL may be headed in the future. To forecast a stock’s future performance, analysts use momentum indicators, which take into account the size and speed of these price movements. As momentum begins to slow, it may be a sign that a recent trend is about to reverse. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for AAPL is 43.66%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 22.28%, tells a different story, and suggests that AAPL currently trades in oversold territory.What do the trading volumes reveal?
In addition to price, analysts use volume trends to predict future performance. The level of trading activity in a stock is often a good proxy for the level of interest and enthusiasm for the name within the investment community. A sudden increase in activity can be a sign that investors are trading in anticipation of a catalyst. Apple Inc. (AAPL) average trading volume of 48,029,984 during the past month is 61.97% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.
AAPL is currently undervalued by -15.53% relative to the average 1-year price target of $192.63 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.00, which implies that analysts are generally neutral in their outlook for AAPL over the next year.How risky is the stock?
In order to put AAPL’s recent price performance into context, we need to get a sense of how the stock moves in relation to the overall market. Beta, which measures a stock’s price volatility relative to the market, provides the cleanest measure of systematic risk for a stock.
Apple Inc. (NASDAQ:AAPL) has a beta of 1.24, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. AAPL therefore has an above average level of market risk. During the past couple of weeks, AAPL average daily volatility was 37.08%, which is -15.26 percentage points higher than the average volatility over the past 100 days.