Apple breaks pressure point on Icahn buy-in
Billionaire investor Carl Icahn generated heavy interest in Apple (NASDAQ:AAPL) Tuesday after proclaiming to the world Icahn Enterprises holds a large position in the maker of the iPhone and iPad. Icahn may not be a social media guru, but his recent tweet couldn’t have come at a more opportune time. Apple share prices have declined more than 10 percent year-to-date, as investors size the company’s growth potential in an overly saturated mobile tech market.
Apple’s price point has hovered around $470 a share since February. Before Icahn’s comments, $470 was a well-defined price point that represented both the upper boundary of a narrow 6-month range and the stock’s 200-day moving average. All of this changed Tuesday when Icahn delivered the following message via Twitter:
“We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come.”
Since Icahn disclosed his company’s interest in Apple, share prices of the global tech giant have soared almost 5 percent. Icahn’s ability to transform a previously bearish price chart into an appealing trade is proof the 77-year old still understands the market. On Wednesday Apple shares surpassed $500 for the first time since January, hitting a session high of $504.25. Apple, Inc. would later consolidate at $498.50, a gain of almost $9. Icahn has yet to reveal the size of his Apple holdings. In a telephone interview shortly after his tweet went viral Icahn told Reuters he believes Apple should be trading at $700 a share.
Apple’s breach of the $470 pressure point appears to have attracted new investors. The stock’s next obstacle is overcoming the May and November 2012 lows of $506 to $522. A breach of the upper level of this benchmark low would make way for an eventual climb to $555.
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