Apple Stock At 52-Week High: But Is The Rally Sustainable In The Long-Term?

The Cupertino, California-based company’s stock is up 58.40% so far this year.

Let’s dig a little deeper to see whether the rally looks sustainable, or is it just a rise with the overall technology sector tide.

Apple stock has been on a tear this past year. Moving averages indicate the short-term rally should continue, as reflected by the Golden Cross on the chart above.

The 50-day SMA has just crossed over the 100-day SMA, typically marking the setting of bullish sentiment among traders.

The RSI, though, appears to be dribbling between the overbought and oversold levels. At 69 on Dec. 14, It’s currently treading towards the overbought level (>70) – which implies that the market may correct with downward pressure in the near term.

Looking at the fundamental picture, Fortnite maker Epic Games‘ recent antitrust ruling win against Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, casts doubt on the stability and safety of Apple’s revenues from its App Store.

After the ruling against Google, Epic Games CEO Tim Sweeny blasted both Apple and Google in an interview with The Verge.

“I would say Apple was ice and Google was fire,” he said.

The App Store commission makes up a large portion of Apple’s revenue-probably between 35%-40%. Regulators are investigating Apple’s App Store for possible anti-competitive practices (duopoly with Google Play).

Moreover, for the past 4 reported quarters, the company has recorded negative year-over-year revenue growth. Talk about the stock – valuation (P/E = 30.21) is well above the sector median (P/E = 24.13%), and way ahead of peers with Dell Technologies Inc (NYSE:DELL) at 10.88, HP Inc (NYSE:HPQ) at 8.98 and Hewlett Packard Enterprise Co (NYSE:HPE) at 8.85.