On January 8, 2016, we posted the following chart:
That red line that says 150 was our projected downside target based on the historical average from as far back as 2004. The update to this chart is below (Altimeter levels adjusted for dividends):
Apple is on the cusp of hitting that downside target. What happens if the stock breaks through on the downside, then you’d want to consider the investment merit of the stock based on conservative fundamental data. Keep in mind that the current P/E ratio of 10 should jump before the stock marches higher.
Do you remember that article we posted on September 23, 2012, about how adding Apple (AAPL) to the Dow Industrials would be “not so great”? Yeah, well, since being included into the index on March 19, 2015, Apple has declined –28% and the company that it replaced, AT&T (T), has increased +19%. True to form, the inclusion of Apple into the Dow Jones Industrial Average coincides with decline in the stock price. The adjustment period should be coming to an end. Let’s see how this plays out.