Apple is finally trading above $600 per share for the first time since 2012. With the iPhone 6’s expected release in August and the potential for a $3.2 billion deal with Beats Electronics, could $700 be just around the corner?
Not so fast, contends Steve Cortes, founder of Veracruz TJM. He's not particularly enthusiastic about Apple's valuations at these levels.
"I think the Street is often backward on Apple," Cortes said. "We get extremely excited when Apple trades above $600. The Street got crazy excited when Apple was up at $700. On the other hand, the Street tends to hate Apple when it's at $500. So, I try to be the exact opposite of that. I love Apple when it's cheap, when it's down near $500."
And, though the potential of a deal with Beats Electronics has thrilled the market, it's a troubling sign, according to Cortes.
"The Beats deal is really not bullish long term for Apple," Cortes said. "It shows us that Apple has become an old tech company, the kind of company that is in acquisition mode rather than innovation mode. We haven't seen any real new innovation out of Cupertino in some time. I think the Beats deal, unfortunately, is a sign of a mature and boring company."
However, Apple shareholders shouldn’t sell their stock, according to Mark Newton, chief technical analyst at Greywolf Execution Partners. A break above its December highs at $568.83 continues to make the stock bullish on both a daily and weekly basis.
"Momentum is getting a bit stretched here in the near term, but I still think the stock can make further headway," Newton said. "The stock likely has a good shot at getting up to former September 2012 highs near $676."
The $676 level will act as strong resistance and may thwart Apple's move to $700 per share. "But, for right now, it's still premature to sell," recommends Newton. "I would use any pullback still as a chance to accumulate the stock."
"Technically, I like the stock," adds Newton. "I would still remain long."
To see the full discussion on Apple, with Cortes on the fundamentals and Newton on the technicals, watch the above video.