Market Analysis: AAPL 7/30/2014

Forget iPhone 6, this could be a huge deal for Apple

The expected iPhone 6 and iWatch may not be the only big things down the pike for Apple.

The tech giant is reportedly looking at getting into the mobile payment business. According to published reports, Apple is said to be in talks with credit card companies to create a service that would allow users to pay for items with the iPhones acting as credit cards.

With Apple now trading near its split-adjusted all-time highs, what will such a service mean for its stock? Gina Sanchez, founder of Chantico Global, believes this would be a potentially big deal for the company.

“Everybody is waiting for the next big thing because that’s what Apple is known for,” said Sanchez, a CNBC contributor. She noted that mobile payments are estimated to grow to $90 billion in 2017, from $12.8 billion in 2012, according to Forrester Research.

“Apple is trying to take the piece that acts as the merchant servicer behind Visa and MasterCard,” she said. “That’s 50 basis points to a percent of that $90 billion. It’s a big market.”

But according to Mark Newton, chief technical analyst at Greywolf Execution Partners, the market has already priced in the new expected products.

“Look at the stock over the last few months; it’s up over 33 percent,” Newton said. “We obviously know the company has a lot of great products in the pipeline. Everybody is anticipating the iWatch and the new iPhones. The stock now is right up to prior highs.”

Newton sees Apple’s stock as being overbought based on its one-year chart. “My concern in the near term is that momentum is really starting to wane since June,” he said. “The stock has been moving higher but momentum has started to slow down a bit. And oftentimes that can be a concern that the stock may have gone a bit too far too fast.

Though Newton says he doesn’t have problems with Apple’s long-term chart, he believes it demonstrates how much is already priced into the stock.

“My thinking is it stalls out,” Newton said. “I would love to get a chance to buy the stock in the low $90s. If it pulls back anywhere near June lows, it would be a much better risk/reward opportunity in my view. But at current levels, I just don’t like it here.”

Article Written By: Lawrence Lewitinn