Apple stock price could soar more than 30% as it outperforms the S&P 500

  • Apple stock has significantly outperformed the S&P 500 amid the rally since the mid-June low.
  • This relative strength sets the stock up for more gains to come, according to Bank of America.
  • BofA sees potential for Apple to trade at $230, which represents more than 30% upside potential.

The world’s most valuable company could soon see big gains if it continues to outperform the broader stock market.

That’s according to Bank of America analyst Stephen Suttmeier, who said in a Wednesday note that Apple has a bullish technical setup that could send the stock above $230, representing upside potential of more than 30% from current levels.

Suttmeier’s favorable outlook on Apple is based on the stock hitting a new relative high against the S&P 500. Apple’s relative outperformance against the broader market has been impressive since the 17 June, with Apple up 31%, more than double the S&P 500’s 15% gain.

“Renewed leadership on new all-time highs against [the] The S&P 500 provides a bullish leading indicator for the absolute price chart,” Suttmeier said.

But stocks can’t go straight up, and Apple would likely have to go through a period of consolidation to digest its recent gains. Suttmeier is watching Apple shares closely to see if they can hold above the $157-$150 area in a possible pullback, as this range represents different levels of technical support.

“Holding above or near the $157 to $150 area on the declines would create an uptrend [inverse] head and shoulders continuation pattern,” Suttmeier said.

The reverse head and shoulders take their form from a series of three bottoms, the second being the deepest. A neckline represents resistance and is formed by connecting the three recovery peaks associated with the three bottoms. This cleavage is currently hovering around the $180 level.

When the security breaks above its neckline, it triggers a buy signal for traders, with a stop loss level being set near the breakout level of the neckline. A measured move price target can be obtained by measuring the distance from the head to the neckline and adding it to the neckline breakout level.

Using this methodology, if Apple stock can surpass its December 2021 peak of around $183, Suttmeier expects a measured move price target in the $230s for the iPhone maker.

Such a move by Apple would undoubtedly represent a bullish signal for the broader stock market and suggest that the current rally from the mid-June low is indeed the start of a new bull market rather than a bearish rally.

Apple technical analysis

Bank of America

Karen J. Nelson