Chart Pro: Investors Should 'Stick With' Apple For The Long Run

Apple Inc. AAPL hoping for a rebound to a $1-trillion valuation level may need to patient, according to Ari Wald, Oppenheimer's head of technical analysis.

What Happened

Apple's market valuation of around $845 billion implies more than $220 billion in shareholder value has been erased since the stock peaked in early October. The recent weakness in the stock could be attributed in part to "broadening market weakness" and shares dipping below a key $194 support level, Wald said during a CNBC "Trading Nation" segment this week.

Taking a step back and looking at Apple's performance versus the S&P 500 since 2012 shows that the iPhone maker's stock is holding onto support levels, he said. 

Apple's stock is still in a relative uptrend when its performance is plotted against the S&P 500 index since 2016, when momentum started to accelerate, Wald said. The two charts imply that Apple will be fine in the long term, but needs some stabilization first.

Why It's Important

Despite Apple's stock being on track for its worst monthly performance since the financial crisis, shares are outperforming the S&P 500 index, Wald said: Apple s up nearly 10 percent for the year, while the S&P 500 index is nearly flat.

What's Next

"I don't think there is a trading call to be make here, but we are recommending for our longer-term clients that are benchmarked against the S&P 500 to stick with it," Wald said. "I think exposure [to Apple stock] is still warranted."

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Photo by Daniel Lu/Wikimedia.