Apple, Inc (NASDAQ: NASDAQ:AAPL) is set to print third-quarter financial results after the market closes Thursday. The stock is trading flat heading into the event.
When the tech giant printed its second-quarter results on April 28, the stock fell 3.66% the following day, resuming a downtrend that eventually brought Apple to a June 16 52-week low of $129.04.
Apple experienced a strong second quarter, reporting an EPS of $1.52 on revenue of $97.3 billion. The company came in ahead of the EPS estimate of $1.43 on revenues of $93.89 billion.
For the third quarter, analysts estimate Apple will print earnings per share of $1.16 on revenues of $82.6 billion.
From a technical analysis perspective, Apple’s stock looks set to trade higher over the coming days, but it should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.
Options traders, particularly those who are holding close dated calls or puts, take on extra risk because the institutions writing the options increase premiums to account for implied volatility.
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The Apple Chart: Apple reversed course into an uptrend on June 16 and has been making a consistent series of higher highs and higher lows during the stock’s 21% ascent off the $129.04 level. The most recent higher low within the pattern was printed on Tuesday at $150.80, and the most recent confirmed higher high was formed at the $156.28 mark on July 22.
- On Thursday, Apple was trading in an inside bar pattern and attempted to break up bullishly from Wednesday's mother bar. If Apple enjoys a bullish reaction to its earnings print, bullish traders would like to see the stock open Friday’s session above the 200-day simple moving average, which could indicate a new bull cycle is on the horizon.
- If Apple suffers a bearish reaction to its earnings print and falls below Tuesday’s low-of-day price, the stock will print a lower low and negate the uptrend. If that happens, Apple will also lose support at the eight-day exponential moving average, which has been guiding Apple higher since July 1.
- Apple has resistance above at $157.26 and $162.14 and support below at $153.92 and $150.
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