Apple shed $24 billion in market value in three days, but one chart points to recovery

Apple shares have gotten mired in the broader tech bloodbath, but one technical analysis points to a blast higher ahead.

The technology behemoth has lost $24 billion in market cap since the market's close last Wednesday, just before the stock hit its year-to-date high of $195.96 per share on Thursday. Its weakness comes amid the broader sell-off in the sector this earnings season, with names like Facebook, Netflix and Twitter under intense pressure.

Heading into Apple's quarterly earnings Tuesday after the bell, however, some analysts are particularly sanguine on the stock. Ari Wald, head of technical analysis at Oppenheimer, said on CNBC's "Trading Nation" that Apple's technical set-up is encouraging.

"The case for Apple, and why we're bullish on it, is really based on the stock's relative performance versus the overall market, … and if we chart that pair, the Apple versus the S&P, the stock is coming to a very important test of multiyear resistance dating back to its all-time relative high, set back in 2012," he said Monday.

Apple is poised to charge higher as it's broken through a six-year resistance level relative to the market, Wald said. He said this is a resumption of a longer-term outperformance trend, and the bull case is intact so long as shares trade above $180 per share (the low from July).

Others are similarly bullish heading into Apple's earnings report. Gina Sanchez, CEO of Chantico Global, said the iPhone maker will manage to hold its head above water since it's not as highly valued a stock as other tech giants. For example, Apple is trading at a little higher than 18 times trailing earnings, while Facebook carries a price-earnings ratio of 27 times, Amazon at 144 times and Netflix at 162 times.

"The fact of the matter is, Apple is not a highly valued stock; it never has been. It really ... continues to pick along," Sanchez said Monday on "Trading Nation," adding that it's becoming more of a "robust" stock in terms of its value.

The market should in fact rotate toward Apple because much of the pessimism around the name has already been "baked in," Sanchez said, referring specifically to concerns about slowing iPhone sales. Continued sales in China will be another a positive factor for Apple, she said.

Wall Street analysts are expecting Apple to post earnings of $2.16 per share, according to FactSet.

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

Videos

Trades to Watch

Trader Bios

About

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.

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

Read more

Connect