Apple. When are the fundamentals of the stock ever going to take charge of its price?

This post is inspired by a post by the user cyice on Stocktwits, who said: “when are the fundamentals of the stock ever going to take charge of its price“.

At $110 a share, Apple ($AAPL) is down around $20 or 16% from it’s highs just over $132. The stock trades at a PE ratio of 13. Minus the $200B in cash Apple has, that’s a PE of about 9. Meanwhile, companies like Google and Microsoft trade at PEs of 20 and 32 respectively.

I won’t go into why the market thinks Apple deserves a PE 1/2 of other tech companies (I wrote it up and decided to scratch it — the market is crazy and crazy hard to understand). If we just assume that the market has different rules for Apple, we can try to figure out what those rules are.

A chart…

aapl_5years

In July 2013, Apple traded at $60 with a PE around 10. It touched $130 this year and a PE around 15 and now trades at $110 with a PE around 13. Also notice how the price bounced off the 200 day moving average in July 2013.

So one answer to the “when are the fundamentals of the stock ever going to take charge of its price” would be around a 10 PE, which would correspond to a price of about $90 and also come close to that 200DMA. I’m long Apple in a retirement account and would back the truck up if it dips down around this area.

ZNGA: Long-term Trend Has Changed

The closing price for ZNGA has risen above its 200-day moving average, indicating a long-term upward trend.

Trend for ZNGA as of Wednesday April 9th, 2014

Long-term: Up

Intermediate: Down

Short-Term: Up

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

TSLA: Long-term Trend Has Changed

The closing price for TSLA has risen above its 200-day moving average, indicating a long-term upward trend.

Trend for TSLA as of Wednesday April 9th, 2014

Long-term: Up

Intermediate: Up

Short-Term: Up

Chart for TSLA

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

MSFT: Trend Has Changed

The closing price for MSFT has risen above its 50-day moving average, indicating an intermediate-term upward trend.

The closing price for MSFT has risen above its 10-day moving average, indicating a short-term upward trend.

Trend for MSFT as of Wednesday April 9th, 2014

Long-term: Up

Intermediate: Up

Short-Term: Up

Chart for MSFT

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

AAPL: Trend Has Changed

The closing price for AAPL has risen above its 200-day moving average, indicating a long-term upward trend.

The closing price for AAPL has risen above its 50-day moving average, indicating an intermediate-term upward trend.

The closing price for AAPL has fallen below its 10-day moving average, indicating a short-term downward trend.

Trend for AAPL as of Wednesday April 9th, 2014

Long-term: Up

Intermediate: Up

Short-Term: Down

Chart for AAPL

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

TSLA: Trend Has Changed

The closing price for TSLA has risen above its 200-day moving average, indicating a long-term upward trend.

The closing price for TSLA has fallen below its 50-day moving average, indicating an intermediate-term downward trend.

Trend for TSLA as of Tuesday April 8th, 2014

Long-term: Up

Intermediate: Down

Short-Term: Up

Chart for TSLA

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

ATVI: Trend Has Changed

The closing price for ATVI has risen above its 200-day moving average, indicating a long-term upward trend.

The closing price for ATVI has risen above its 50-day moving average, indicating an intermediate-term upward trend.

Trend for ATVI as of Tuesday April 8th, 2014

Long-term: Up

Intermediate: Up

Short-Term: Down

Chart for ATVI

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

ATVI: Long-term Trend Has Changed

The closing price for ATVI has risen above its 200-day moving average, indicating a long-term upward trend.

Trend for ATVI as of Monday April 7th, 2014

Long-term: Up

Intermediate: Down

Short-Term: Down

Chart for ATVI

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.

AAPL: Trend Has Changed

The closing price for AAPL has risen above its 200-day moving average, indicating a long-term upward trend.

The closing price for AAPL has fallen below its 10-day moving average, indicating a short-term downward trend.

Trend for AAPL as of Monday April 7th, 2014

Long-term: Up

Intermediate: Down

Short-Term: Down

Chart for AAPL

Stock Chart

This post was generated by our Market Trends tool. The trends are simply based on the 10, 50, and 200-day moving averages. View the current market trends or analyze your own stocks.