ONE-TWENTY TWO - A collection of personal articles on financial markets including analysis you can use


Apr
19

Chart Review: Did Apple Already Start Its Next Sprint Higher?

written by Dr. Duru
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This is a quick follow-up to my piece three days ago summarizing the pre-earnings technical outlook on Apple (“Apple Teeters On Critical Support Ahead of Earnings…and the Next Sprint Higher?“).

I thought I would be writing this commentary AFTER earnings, but it seems Apple (AAPL) may have already started its next sprint to higher prices. Monday’s knee-jerk selling after the S&P’s warning on U.S. debt caused broad-based declines in stocks. Apple was not spared, but unlike most stocks it fully recovered and even closed higher on the day. This break below support, followed by a rush of strong buying, is what I was trying to anticipate AFTER Apple reported earnings. Monday’s selling seems to have done the work a bit early. Tuesday’s buying provides convincing confirmation of the resurgence.


Apple's 2-day dash may be just the beginning of the next run

Apple's 2-day dash may be just the beginning of the next run



So now, instead of looking for a post-earnings move that resembles the last two days of trading, I am turning my attention to the high likelihood that the last area of support has already received a final stamp of approval. Here is the long-term chart I posted earlier that shows Apple’s tendency over the past two years to move in sprints after churning in place for extended periods:


Apple's steady march higher has consisted of brief sprints and long rest stops

Apple's steady march higher has consisted of brief sprints and long rest stops


*All charts created using TeleChart:

To be clear and to clarify, I am not trying to anticipate the content of the earnings announcement. Instead, I am thinking through how the stock might respond if the announcement provides any excuse to sell the stock. (As I have mentioned a few times before, I think investors and traders will be unforgiving this earnings cycle in their initial responses to earnings announcements with any blemishes).

Be careful out there!

Full disclosure: no positions

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