Fasciocco explains, "We have seen extremely strong accumulation in Apple since late on Friday and a nice gap move higher on Monday on the breakout. Our momentum indicator on the stock is also bullish and the accumulation - distribution line is in a solid up trend."
The advisor notes, "This fiscal year -- ending Sept. 30 -- AAPL should post a big 61% jump in net to $3.71 a share from $2.31 a share a year ago. Next fiscal year 2008, AAPL's net should rise 17% to $4.35 a share from $3.71 a year ago."
The past three quarters AAPL has surprised big on the upside, he observes. It topped the consensus by 21 cents, 24 cents and 36 cents a share the past three quarters. Says Fasciocco, "We see chances for an upside surprise."
He adds, "The stock's valuation is high, with the shares selling at a 40 price-earnings ratio. The key will be to see if AAPL can come up with another big winning product. Thus, a lot will depend on the firm's forecast of earnings and product development news." For now, the advisor has set an intermediate term target of 170 and recommends a rotective stop near 140.
Each day, Steven Halpern's TheStockAdvisors.com features the latest stock picks and investment ideas from the nation's leading financial newsletter advisors.