After topping the latest list of new buys by top mutual funds earlier this month, Apple (AAPL) has now earned a spot on the IBD Breakout Stocks Index. AAPL stock has just reached a new buy point as stock market indices look to build on a new uptrend.
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In this month’s report of new investments by leading wealth managers, top funds bought an estimated $2.4 billion worth of Apple stock. That eclipsed impressive investments in other tech titans NVIDIA (NVDA) ($1.5 billion) and Microsoft (MSFT) ($972 million), which narrowly missed out on a seat at the billion-dollar table. alphabet (GOOGL) raked in a more modest $334 million.
On March 8, Apple introduced a lower-priced 5G iPhone and a high-end Mac computer for creative professionals. At Sunday night’s Oscars, Apple’s “CODA” won the Best Picture, Best Supporting Actor, and Best Adapted Screenplay categories. Star Troy Kotsur became the first deaf male actor to win an Oscar.
And in a different role, Apple recently announced that Arizona is the first state to offer driver’s licenses and state IDs in Apple Wallet. Other states that will follow are Colorado, Hawaii, Mississippi and Ohio. In a recent survey conducted by IBD and TechnoMetrica, Apple Wallet received top honors for the best overall digital wallet customer experience.
Last week, Google, a unit of Alphabet, announced it would allow alternative payment systems on Google Play. Analysts say this will put pressure on Apple to make similar changes to its App Store.
Who Joins AAPL Stock in the IBD Breakout Stocks Index?
Apple tests new buy zone
Reflecting the volatility of this year’s stock market, Apple has formed a double bottom pattern. The buy point is at 176.75. With that, AAPL stock marked 11 consecutive trading days and topped this entry on Tuesday. The stock gained nearly 2% on average, but with increasing volume. Apple ended its winning streak on Wednesday, slipping under 1% on below-average volume to close right around the buy point.
As noted in Tuesday’s The Big Picture, Apple’s breakout was the first among major tech stocks since the following day, March 16, marked a market reversal.
On a weekly chart, the relative strength line has already reached a 52-week high when Apple breaks out.
GOOGL, MSFT and NVDA stocks show tech stocks have rallied since the follow-through day and are all blinking signs of renewed strength. All three stocks reclaimed their 50-day moving averages, although the 50-day moving average remains below the 200-day benchmark for Alphabet and Microsoft. Watch for that to reverse to show improved technical strength.
While Alphabet, Microsoft, Nvidia and Apple all slipped on Wednesday, watch out if Apple can start a new winning streak and start another surge.
IBD Breakout Opportunities ETF
Innovator Capital Management’s IBD Breakout Opportunities ETF tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund essentially allows you to invest in the entire index, in addition to or instead of buying individual stocks. Find out more about the ETF and Innovator funds here.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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