The ploys of billionaire Carl Icahn fueled strength in Apple shares as the stock returned to the $500 threshold for the first time since Jan. 23. According to Thomson/First Call 18 analysts have a strong buy rating and 22 have a buy rating. There are 11 hold ratings, and one each has under-perform and sell ratings.
At ValuEngine Apple is rated hold and is overvalued by 13.3% with a one-year price target at $503.84, which has been tested this week. The key for the stock is now technical momentum. The stock is overbought on its daily chart and has a positive weekly chart profile after the stock held its 200-week simple moving average at $286.51 at the end of June. Apple has mojo status as long as weekly closes are above its five-week modified moving average at $461.89.
My proprietary analytics correctly projected that Apple would return to my annual pivot at $510.64 where buy-and-trade investors should book some profits. To gain additional mojo the stock must have a close today above $510.64 as such indicates upside to my semiannual risky level at $620.84.
A reason why Apple may be stalling this week after trading as high as $513.74 on Monday is based upon what's called Fibonacci retracements. From the all-time high of $705.07 set on Sept. 21, 2012 to the 2013 low of $385.10 set on April 19, the 38.2% Fibonacci retracement has been a magnet this week at $507.82. If the week's close is above $510.64, the 61.8% retracement is the next target at $583.61.
Since the end of June to this week's high Apple shares are up 32%, which makes Apple a mojo stock once again. Additional upside is possible, but pair back on buy-and-trade positions.
Google set an all-time high at $928.00 on July 15 then some on Wall Street raised their price target to $1,000. According to Thomson/First Call the highest price target today is $1,175. 11 analysts have a strong buy rating and 21 have a buy rating. There are 12 hold ratings, no under-perform or sell ratings.
At ValuEngine Google is rated hold and is overvalued by 29.8% with a one-year price target at $904.42. Like Apple, the key for Google is now technical momentum. The stock is oversold on its daily chart and has a negative weekly chart profile. The stock is below its five-week modified moving average at $881.32 with declining momentum.
My proprietary analytics shows a quarterly risky level at $915.63 which was tested at the all-time high. Google has been trading under the influence of semiannual pivots at $880.48 and $892.48 since July 19, which lines up with the 50-day simple moving average at $890.34. Without a clear value level the downside risk is to the 200-day SMA at $805.43. Google's major mojo run began from the 200-day when it was $638.41 tested and held on November 16, 2012.
Since the end of June Google shares set its all-time high, and have since moved sideways to down, which is a sign that the stock has lost its mojo status. The buy-and-trade strategy is to buy weakness to the 200-day.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.