Apple delivered better-than-expected earnings and shares are now up 25% from the June low. Here’s how to trade it from here.
Apple (AAPL) – Get Apple Inc. Report is turning heads and giving bulls something to cheer for on Friday. While shares are up “just” 3.3% so far on the day, it’s a nod that the bulls needed.
Amazon (AMZN) – Get Amazon.com Inc. Report may be getting all the attention with its shares up 11% in a post-earnings celebration, but Apple stock is also higher following a better-than-expected quarter.
Investors were worried about potential supply chain issues and recession fears hurting sales. Turns out, it wasn’t a problem.
Apple delivered a top- and bottom-line beat and while management did not provide guidance for next quarter, the company said revenue should accelerate on a year-over-year basis.
That apparently is good enough for investors, as Apple stock stitches together its fourth straight weekly rally and is suddenly higher by 25% from the June low.
With the positive reaction across FAANG this earnings season — with exception to Meta (META) – Get Meta Platforms Inc. Report — bulls gained a key component for upside momentum. Now the question is, can it be maintained?
Trading Apple Stock After Earnings
Daily chart of Apple stock.
Chart courtesy of TrendSpider.com
Notice the way that Apple stock has been tearing higher over the last month. Shares easily cleared the key $150 to $152 area earlier this month, which was the prior month’s high and the first-quarter low.
After pushing through this zone, Apple stock ran into the 50-week moving average, pulled back to this aforementioned $150 to $152 zone and found support. This was a key development for the bulls, as it would have been easy for Apple to break down and move lower.
Instead it pushed higher ahead of earnings and now we’re seeing more follow-through as shares clear the 200-day moving average, 61.8% retracement and the weekly VWAP measure.
All of this is very impressive price action. Clearing all of these measures doesn’t mean Apple can’t go back down, but the benefit of doubt now lies with the bull case.
If the stock were to lose some of these measures — like the 200-day and 50-week moving averages, the weekly VWAP measure and short-term active support via the 10-week moving average — then the bears can harness momentum.
Until that happens though, we have to assume that the buyers are in control. If Apple can clear the $164 to $166 area, that opens the door to the 78.6% retracement near $169.
A move above that will technically put $175 to $178 resistance back in play. Given the current investing environment, that’s hard to imagine right now. However, it is possible if bulls remain in control.
As for support, bulls would love to see the $158 to $160 area hold on a pullback.