If there’s ever a time that Apple stock deserves to hit new all-time highs, it’s now.
In January, the company reported a robust earnings report, beating earnings and revenue. Sales of $111.4 billion beat expectations by $8 billion. Despite the record report, Apple stock slumped on the results, ultimately giving up its recent breakout over $138.
Fast forward three months and we have an even more impressive result.
Revenue of $89.6 billion beat analysts’ expectations by more than $12 billion. What!? Earnings of $1.40 per share came in more than 40% ahead of consensus estimates. Even the highest expectations on the Street — calling for $1.09 in EPS and $83.2 billion in sales — was an easy beat.
In pre-market trading, the stock is up 2.6% to $137. Can it break out?
Danny Riley is Mr. Top Step’s 39-year veteran of the CME trading floor and ran one of the largest S&P desks on the floor. Here’s what he’s thinking each morning before the stock market opens.
Trading Apple Stock
Like I said, if there’s ever a time that Apple stock deserves to breakout, it’s now. The question is, will it?
With the positive results from Alphabet and Facebook, FAANG (and by extension, the Nasdaq) should have the wind at its back on Thursday. It helps that the State of the Union address from President Biden isn’t rattling the markets.
Shares closed right on the 10-day moving average ahead of earnings as $135 kept a short-term lid on Apple. Now pressing $137 in pre-market trading, you can see how resistance looms large.
Clearing $138 opens the door to the $145 highs from January. If Apple can clear this level too, $150-plus is in play and ultimately, the 161.8% retracement up near $160.
On the downside, I don’t know where this name goes if the breakout fails. I can imagine a scenario where bulls don’t buy the breakout, even though the quarter was robust and the stock has been consolidating for eight months. However, it’s hard to imagine bulls letting this one slip too far, short of a market-wide dump.
Here’s the bottom line: Watch $138. It’s the line in the sand right now and all we’re really worried about.
As we all know, there’s no crystal ball when it comes to trading stocks, options or futures. But the Market Imbalance Meter may be as close as it comes. Knowing how the “Big Money” is placing its bets can give our trading room a big wave to ride — or a warning sign to stay out of the water. Come check it out now, risk free for 30 days.
