Apple passes $900 billion in market cap but strategist says it’s a ‘screaming sell’

Shares of Apple rallied after hours Thursday following an earnings beat for the tech giant, but that's not stopping one strategist from hitting the sell button on the stock.

Despite Apple's 45 percent surge this year and high demand for the iPhone X, Larry McDonald, head of U.S. macro strategies at ACG Analytics, still believes the stock had already gone too far, too fast ahead of the latest earnings report.

"You're talking about a company with a market capitalization of $865 billion that's trading close to 15 percent above its 200-day moving average," he said Thursday on CNBC's "Power Lunch." "That is something you don't just want to walk away from, [you want to run away]. It's a screaming sell."

This, along with the fact that China is "deleveraging in 2018" could threaten the company's sales in Asia.

Miller Tabak equity strategist Matt Maley, however, says the "higher highs, higher lows" in the stock's chart makes it look attractive. Plus, the trading volume going into Apple more recently has Maley believing that the most recent rally is more sustainable than before.

"One thing I had been concerned about is every time the stock rallied, they did so on lower volume and sold off on bigger volume," he said on "Power Lunch. "However, the more recent rally [saw a break of about 5 percent] that has come on a pickup of volume, which should be good. "

In fact, Maley also believes that despite the fact that Apple is "overbought on a near-term basis," it is still relatively cheap compared with the so-called FANG stocks, Facebook, Amazon, Netflix and Google parent Alphabet.

This alone could make Apple a "candidate for buy on weakness" if the stock pulled back about 8 percent, Maley said.

The strategist's basis for that pullback comes from the fact that when Apple has traded in an "uptrend," as exemplified by a line in Maley's chart, the current uptrend line is sitting at $150.

In the past, the tech giant has fallen back to that line after a rally. The stock soared past $173 almost immediately after the company released earnings.

If Apple were to open at this level Friday, it would mark another all-time high for the stock.


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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