Apple Stock had a strong 2014 due to the release of the iPhone 6 and strong earnings reports. The stock climbed almost 50% from the beginning of the year, moving above $100 per share and achieving a market capitalization of over $700 billion, double what it was when Tim Cook took over as CEO in August of 2011. The demand for the iPhone 6 overwhelmed analysts’ and even Apple’s expectations, as the device had the best holiday season of any of the iPhones released until now. This caused the stock to climb to a peak of over $119 on November 28th, 2014.
A few days later, I Know First published an article on Seeking Alpha explaining what caused the stock to climb so rapidly throughout the year to that point. At the time, analysts remained very bullish on the stock, believing that its price would continue to rise. Apple had a new iPhone that was popular with consumers, and it was entering new exciting markets with Apple Pay and the Apple Watch, which is expected to be released in the next few months. These encouraging offerings caused analysts to raise their price targets and recommend buying the stock, as can be seen in the chart below showing their predictions from that time.
I Know First’s state of the art market prediction algorithm is not affected by psychological factors. Analysts often try to satisfy market expectations, often overvaluing a stock that is exciting and liked by investors. The algorithm had been bullish on Apple throughout 2014 until November 28th, when it suddenly turned bearish for the 7- and 14-day time horizons. Over that time, the stock fell 3.3% and 7.74%, respectively, in accordance with the algorithm.
In the same article, I Know First posted its current prediction for the one-month time horizon for December 2nd. At that time, Apple had a signal strength of -5.55 and a predictability indicator of 0.53. The signal strength is the predicted movement direction or trend of the stock, and is not a predicted price target or percentage. A negative signal, as Apple had in this prediction, means the algorithm predicted the stock price would decrease. In accordance with the algorithm, the stock price fell 7.66% over that time.
For such an established company with a huge market cap, Apple stock is quite volatile, making it possible for investors to make a profit off of it. Using an algorithm like I Know First’s can help investors realize when there is such an opportunity, as evidenced by how the algorithm was correctly able to predict the stock’s movement throughout 2014. With Apple entering new markets and the tech industry always changing rapidly, investors will once again have a chance to profit off the stock if they can properly realize where there are opportunities in 2015. To get the “Top Tech Stocks” package for updated algorithmic predictions on Apple and other tech companies, click here..