Apple (NASDAQ: AAPL) has emerged as a strong buy amid a volatile tech market, supported by a combination of technical indicators and fundamental factors.
Although the correction from December’s all-time high (ATH) of $259.02 reflects a technical bearish leg, the stock’s recent price action signals the potential for a medium-term recovery.
At the close of trading on January 28, Apple shares were priced at $238.26, marking a 3.65% gain over the past 24 hours. Despite the recent uptick, the stock has fallen 4% since the start of the year, weighed down primarily by sluggish iPhone sales in the crucial Chinese market.
Picks for you
A technical rebound in play for Apple stock
A recent analysis by TradingShot highlights that Apple’s stock has been trading within a two-year Channel Up pattern, with the latest correction aligning with the technical bearish leg of this trend.
On January 28, the stock tested the 200-day moving average, a key technical level, for the first time since May 2024, triggering a sharp recovery.
This rebound was further supported by the one-day Relative Strength Index (RSI), which dropped to the oversold threshold of 30, a level historically regarded as a reliable buying signal for investors.
The correction also mirrors previous patterns, such as the October 2023 pullback, which bottomed at the 0.618 Fibonacci retracement level before staging a significant rally.
Based on these patterns, Apple’s next target stands at $260, presenting a medium-term upside for investors.
“Since December already completed a +59% rise from the April 19 2024 Low, we might be having technically a medium-term rebound similar to the October 26 2023 one that re-tested the High’s Resistance (at the time). As you can see both corrections have hit the 0.618 Fibonacci level. As a result, we treat this as a solid buy opportunity to target $260.”- TradingShot
Fundamental factors supporting Apple’s growth
Beyond technical indicators, Apple presents a promising performance outlook driven by strong fundamental factors.
With its fiscal first-quarter earnings report scheduled for release on January 30, investors are anticipating critical insights into the company’s ability to balance growth and stability.
Core drivers, including iPhone sales and the expansion of its high-margin Services segment, continue to shape Apple’s stock trajectory.
The iPhone remains Apple’s most significant revenue contributor, accounting for 48.7% of fiscal Q4 2024 sales. However, the company faces challenges in China, where competition from local tech giants such as Huawei and Xiaomi has intensified.
Analysts project that fiscal Q1 2025 will deliver $70.7 billion in iPhone sales, with full-year iPhone revenue expected to reach $207.7 billion in 2025, according to data from Visible Alpha.
Nevertheless, full-year iPhone revenue estimates have been revised downward since early August 2024, reflecting ongoing concerns about Apple’s ability to sustain momentum in key international markets.
Services segment: A bright spot
Despite these headwinds, Apple’s Services segment continues to deliver robust growth. The segment, which includes Apple TV+, Apple Pay, and the App Store, is expected to grow 13.2% year-over-year to $26 billion in fiscal Q1.
Moreover, Apple’s approach to artificial intelligence sets it apart from its peers in the so-called ‘Magnificent Seven’ tech giants. During the recent tech-sector selloff sparked by the emergence of Chinese startup DeepSeek, Apple defied the broader market trend, rising 1.3%.
The company’s cautious AI investment strategy has allowed it to sidestep the risks of an overinflated AI bubble, a concern that has weighed on peers such as Microsoft (NASDAQ: MSFT)
That being said, with a medium-term price target of $260 and a promising outlook ahead of its fiscal first-quarter earnings report on January 30, Apple continues to present an attractive opportunity for investors seeking growth and stability in the volatile tech sector.
Featured image via Shutterstock
