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Apple is 'still a cash machine,' strategist says

Even as Apple shares surge to multimonth highs, strategist Max Wolff sees further gains ahead.

"We think there's still some sweetness, and not much vinegar, in the cider here," the chief economist at Manhattan Venture Partners said Monday on CNBC's "Power Lunch."

Wolff said a growth in services outweighs drawbacks like weak iPad and MacBook sales.

"We think this is still a cash machine, still a huge margin story."

Apple shares rose to the highest level since April on Friday, days after reporting quarterly earnings and revenue that topped analysts' expectations. On Monday, it closed 1.77 percent higher but it was down slightly in premarket trading Tuesday.

Technical analyst Ari Wald of Oppenheimer said Monday the charts also look bullish.

Wald pointed to one chart showing a recent rally after year-over-year decline — a pattern he sees as an "island reversal."

In April, the stock gapped below the $101 mark, and following its earnings last week gapped above it, trading about $105. This type of pattern indicates "selling exhaustion," perhaps marking a bullish reversal in its trend, Wald told CNBC.

He said this sets up a rally headed into a resistance level of $112, which was a high from earlier this year.

Even if the stock doesn't rise to $112, however, it could still be a smart buy.

"We see this as a winner going forward, as a safer place for your money," said Wolff, who is bearish on the overall market.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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