Thomson Financialis Squawk Box, (TSB) a source of commentary and intelligence on market-moving activity, said on Monday that they see early turnaround signs for AAPL based on three separate timing indicators. They reported that the risk-reward for AAPL now favors buyers.

In the report, carried by Forbes, Thomsonis sequential timing indicators flashed a reversal signal on Monday. In addition, the trend intensity studies havenit signaled a downtrend for the AAPL weekly chart. "But Trend Intensity is telling us that the stock is merely consolidating," the report said.

Technical factors have contributed to the buy recommendation. "It [AAPL] still has the highest possible score of 10 on the Thomson Ratings system, with the highest-possible scores for fundamentals and relative valuation," according to TSB. Its forward price/earnings to growth ratio is a 44% discount to its sub-industry group, and a 52% discount to its relative five-year average. Moreover, the companyis trailing P/E, forward P/E and forward PE/G are all near five-year lows."

The analysis pointed to a faulty understanding by traders of Appleis latest earnings report. While Apple shipped 22.1 million iPods, short of the 25 million anticipated, the real story was the growth of Macintosh sales, and the Mac carries much higher gross margins. "And with Mac, Apple posted 44% year-over-year growth in unit shipments, one of its strongest quarters in several years, driven by the companyis new and improved Leopard operating system," TSB said.

Regarding what some saw as disappointing iPhone sales, TSB pointed out that the product is still in is infancy. The verdict was that many more iPhones have been purchased and unlocked by clever users than those simply sitting in the warehouses. Moreover, those unlocked phones were characterized as a problem for AT&T but not for Apple.

In summary, TSB wrote: "We have yet to see an ironclad Apple turnaround signal. But we are starting to look for one near current levels, and would suspect that support around the $120 level, dating to August lows, provides a likely worst-case scenario for the stock in coming months."

In afternoon trading, AAPL has been holding steady in the US$130-133 range.

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In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.