Apple share price analysis for May

The shares are likely to move higher next month

0'>Apple shares have rebounded 31 per cent from the lows made in March 2020, following a 35 per cent decline from its all-time highs. One of the benefits Apple has garnered is the increase in phone use due to quarantine. People are getting their news and entertainment through their iPhones and this will likely continue providing an opportunity for Apple to pitch upgrades. On top of that, Apple is launching a new lower-cost phone which could provide them with a new revenue stream.

Volatility has eased

Apple investors have faced a wild ride, making it very difficult to hold on. Not only did prices drop 35 per cent from the highs, but implied volatility surged, substantially increasing the daily swings. The Apple VIX surged in March to a high of 104, which implied a 6.5 per cent move daily. The Apple-VIX has settled into a tight range of around 47 per cent, which is still above the 200-day moving average of 35 per cent. While this number remains elevated it should still provide opportunities for both traders and long-term investors.

How did Apple perform in May before?

0'>Apple shares have outperformed in May during the past five years, but the performance is not as striking over 10 and 20-years. During the past five years, Apple is higher 80 per cent of the time, with an average monthly gain of 3.9 per cent. Over a 10-year period, the shares are higher 60 per cent of the time for an average gain of 1 per cent.

Apple share price technical analysis

Apple stock prices rebounded throughout the latter part of the week and closed near the highs notching up three consecutive weekly gains. Prices rebounded at an upward sloping trend line that comes in near $224 and has recaptured resistance which is now short-term support near the 10-week moving average at $270. Target resistance is seen near the all-time highs at $328.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal near oversold territory and has rebounded sharply. The fast stochastic is currently printing a reading of 55, which is in the middle of the neutral range. The relative strength index moved sideways, after rising consistently from the recent bottom which reflects decelerating positive momentum.

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Medium-term momentum is rising as negative momentum fades. The MACD histogram hit a bottom and has started to higher, and is poised to test the zero index level which would generate a buy signal.

Apple Inc
Daily change
Low: 147.63
High: 148.12

Apple stock analysis: the bottom line

Apple is working with Alphabet on a product that captures the bluetooth of other phones and will alert you about coronavirus clusters. This will likely make the iPhone more of a necessity. The company is also offering a new phone at $399, and will likely get several upgrades as demand builds during the quarantine. The technical picture is positive and strong momentum points to a test of the all-time highs. Look for Apple shares to move higher in May, but the ride will be rocky as volatility remain elevated.

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