Analysis: Apple is oversold

“A bullish investor could look at AAPL’s 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself.”

From “Apple is oversold” Posted Thursday on Dividend Channel:

[I]n trading on Thursday, shares of AAPL entered into oversold territory, changing hands as low as $138.80 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In the case of Apple Inc, the RSI reading has hit 29.6 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 36.7. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, AAPL’s recent annualized dividend of 0.92/share (currently paid in quarterly installments) works out to an annual yield of 0.63% based upon the recent $146.50 share price.

A bullish investor could look at AAPL’s 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Among the fundamental datapoints dividend investors should investigate to decide if they are bullish on AAPL is its dividend history. In general, dividends are not always predictable; but, looking at the history chart below can help in judging whether the most recent dividend is likely to continue.

My take: Andy Zaky used to write a lot about the Relative Strength Index. I remember him following Apple’s RSI in 2012-2013 all the way down to his Bullish Cross Fund’s collapse.

See also: The rise and fall of Andy Zaky

4 Comments

  1. Robert Paul Leitao said:
    Yes. Apple is oversold. Yes. Apple’s dividend growth has been consistent. Yes. There’s plenty of room (and cash) to support continued dividend increases. In my view, beginning next April, Apple will gradually allocate a higher percentage of the capital return flow to the dividend. No. Most investors don’t look at Apple as a “dividend stock.” Yes. As interest rates rise to levels unseen in years, dividends will become a more important factor in investor purchase decisions.

    3
    May 13, 2022

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