Apple (AAPL) recently had a dominoes effect on corporations supposedly enmeshed with their new products. Share-prices of numerous organizations fell as a consequence of media-frenzy rumors. One of the companies touched by this headwind was GT Advanced Technologies Inc. (GTAT).
Why Did GTAT Share Prices Increase In The First Place?
[Image Above Designed By Author Utilizing Signavio BPMN 2.0 Software]
Unfortunately, media plays a populous role in raising beta values of the market as a whole. This volatility can be appropriated as advantageous, for investors who have done their homework.
[Image from TDAmeritrade (c) Platform]
The technical analysis exhibit overhead demonstrates a bearing GTAT has held during the prior three months. For those who do not understand the upcoming, bold formatted, terminology, please utilize Investopedia as a guide.
In July 2014, BBands began to squeeze. Antecedent to expansion of width, the equity was trading beneath the lower band. For nearly a month, share prices decreased. August 2014 presented another squeeze. Prior to the bubble, GTAT crossed the top BBand. The equity then traded above the middle band for roughly a month. Media intruded, convincing short-term investors the iPhone 6 would contain GTAT’s prodigious, sapphire glass. Although this may be true in the long-run, production could never meet demand so soon.
Another squeeze has occurred. Squeezes are indicative of a shift in trend. The equity may have already hit rock-bottom. In order to support this hypothesis, other technical indicators must be evaluated.
[Image above cropped from TDAmeritrade (c) Platform. Marker analysis completed by author]
Stochastic: In July 2014, as the BBands began to squeeze, both %K and %D demonstrated a bullish trend towards over-sold territory. BBand squeeze in August, demonstrated a bullish trend towards over-bought territory. The recent squeeze has caused another bearish shift into over-sold territory.
RSI: Trend was analogous to Stochastic.
MACD Histogram: Divergence complemented the other two technical’s and BBand patterns.
Based on the parallel orientation of technical’s described above, I would assume a shift in trend, returning the equity share holder bounty to $20/share. Tangible results from technical tailwinds may take a month to be realized. This estimate is less conservative then both Cowen and Company and Goldman Sachs; $18 and $14/share respectively.
New Patents Scream “HOLD ON”
Patents are excellent sources for traceability to future industry disruptions. Apple had roughly 50 patents approved this month.
The image above describes a method to strengthen Sapphire glass. The patent was filed in August 2014.
The patent above, filed in July 2014, illustrates an ion implant methodology. This allows the “Indicia” to be placed between two layers of Sapphire glass. What’s overhead may relate to the sapphire glass patent below; granted in July 2014.
The patent above may align with that below. Filed in 2013, a layer of sapphire laminate may be applied to future AAPL products.
The most convincing patent, demonstrating mass utilization of sapphire, is shown in the image below. The product is a “…Saaphire Flexible Transparent Display…” produced with liquid metal.
Immediately after acquiring a position with sapphire producing giant, GTAT, why would AAPL waste time patenting numerous sapphire products? AAPL is not one to waste time or money.
GTAT is still its own entity. Involvement with AAPL is just one lucrative aspect of its business. With a forecasted global shortage in GTAT’s primary product, as demonstrated in the graph below, the sky is the limit for GTAT.
Disclaimer: Shawn Arshad is not certified to give financial advice. Although well researched, please do your own research prior to investing. Shawn is not responsible for any actions one makes based on the information he provides. Shawn holds a long position in GTAT. Shawn has no plans to initiate a position in AAPL within the next 72 hours.