Apple Has Mojo, Google Does Not

TheStreet.com

NEW YORK (TheStreet) -- When you compare Apple and Google you must consider both fundamental and technical analysis. When Apple traded below $400 in April and in June, the stock became the cheapest value stock in the ValuEngine universe and had a buy rating. Google on the other hand has been overvalued all year so far.

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.

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