Technical and fundamental analysis for Appe Inc - Essay Example

16 1. Introduction: Apple Incorporation is believed to be one of the most leading and most researched stocks, which is traded in different stock exchanges. Technical and fundamentals of stocks such as Apple, Google etc. are more commonly studied and researched by number of different financial researchers and analysts Grady (2008). The paper is based on analyzing the stock of the Apple inc., from both technical and fundamental perspective. As the current situation identifies that there is big debate whether the apple can sustain its current market share in the market in terms of its tablets and Smartphone or not?

Moreover, Apple is issuing more debt to repurchase shares from the market, the impact of debt increase will make investors demand higher rate of return on their investments and this coupled with low cash flows definitely reduces the intrinsic value of Apple’s share price. Apple is expected to continue to issue more debt. Despite of all the expectations, what is the outcome for the investors of Apple stock (AAPL.O). The purpose of the paper is to analyze apple stock in terms of investment perspective, whether it’s a good buy or sell.

The first section of the paper is based on the technical analysis. . Therefore, the stock of apple is analyzed technically by evaluating its trends, which refers to the past data analysis, moving averages, moving average convergence and divergence and relative strength index. The idea behind using different method for evaluating the same stock under technical analysis is that the stock’s analysis and its movement can be confirmed from different angles. The second section of the report is based on the fundamental analysis of the Apple Stock (AAPL.O). The fundamental analysis is concerned with calculating the intrinsic value of the firm using its financials.

The stock is evaluated in terms of its ratios, which are derived from the financial statement of the firm. The stock evaluation of Apple incorporation is conducted using different fundamental research model. Stock is initially analyzed using the Graham Valuation Screen, in terms of value investors. The Dividend Discount Model , which calculates the intrinsic value in terms of dividends. As the stock evaluation is conducted in terms of value investors, therefore the Graham Valuation Model is more appropriate as compared to methods such as GARP. 2. Technical Analysis: Technical analysis is based on the evaluation of the stock in terms of historical data and its movements.

There are different methods adopted to conduct technical analysis of the stock of Apple Incorporation to analyze the stock price movement more effectively. Technical analysis can be used in two different ways a) Predictive Technical Analysis b) Reactive Technical Analysis 1) Predictive Technical Analysis: The Analyst use the analysis to project the price of the stock based on its past movements. The analysts make money by selling their projections to investors. 2) Reactive Technical