Should You Buy Apple on the Dip?

It's unusual to see shares of Apple Inc (NASDAQ:AAPL) fall into oversold territory, but that's exactly where they are right now. With a relative strength index (RSI) of less than, 30 (when a stock falls below this threshold it is considered to be oversold), the top tech stock has been falling sharply in recent days. This is a rare occurrence and it is the only time Apple's shares have been at an RSI below 30 in the past year.

Apple's stock is down a total of 15% over the past month while the NASDAQ has fallen by more than 3%. The company is coming off a strong first quarter to start fiscal 2021, posting year-over year sales growth of 21% while its per-share earnings improved by 35% -- hitting new all-time highs. That is hardly the recipe for a large selloff.

However, with interest rates starting to spike, investors are getting a bit apprehensive, especially with high-valued stocks like Apple. The tech stock is valued at more than $2 trillion. And with a price-to-earnings multiple of more than 33, it isn't a cheap buy given that in its most recent fiscal year, sales grew at a rate of just 5.5%.

The company's brand still looks to be strong but there's no doubt Apple's stock is on the expensive side, even with this recent slide. However, if you are looking for a long-term buy, now could be a good opportunity to buy the stock as it is likely to continue rising over the years given the popularity of its products.