History Says It's Not Too Late to Ride the Apple Rally

AAPL shares have been on fire after earnings and Buffett endorsements

May 7, 2018 at 1:30 PM
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The shares of iPhone maker Apple Inc. (NASDAQ:AAPL) skyrocketed last week, thanks to the combination of strong earnings and news of an increased stake by Warren Buffett. The tech titan surged 13.3% last week -- its best week since October 2011 -- and was higher every single session. What's more, strength could beget strength for AAPL stock, if recent history is any guide.

Prior to last week, the last time Apple shares enjoyed a five-day winning streak was in mid-February, after the stock market correction. Since 2010, there have been just 38 five-day winning streaks for AAPL, according to data from Schaeffer's Senior Quantitative Analyst Rocky White.

One day later, the stock was up 0.25%, on average, and higher 57.9% of the time. That's better than the stock's average anytime one-day gain of 0.1%, with a win rate of 52.5%. What's more, Apple shares are set to end a sixth day in the black today, last seen 1.6% higher at $186.62, and fresh off a new all-time peak of $187.67, after Buffett said he'd "love to own 100% of it."

One week after five-day winning streaks, AAPL was up 1%, on average -- more than double its average anytime gain of 0.48%. Further, the stock was in the black more than 71% of the time a week after these streaks, compared to 56.5% anytime. One and three months later, Apple shares also averaged bigger-than-usual gains of 2.47%, and 7.87%, respectively, and sported a win rate of 83.8% six months after five-day winning streaks.

aapl after 5day win streaks

In conclusion, if past is prologue, Apple stock could continue to outperform -- especially in the near term. It's also worth noting that after the last three times the equity advanced 10% or more in the course of one week, AAPL was higher six months later 100% of the time, with an average gain of 24.5% -- roughly double its anytime gain of 12.74%, looking back to 2010.

 

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