Earnings Play: Apple

Apple's 3Q earnings release is expected on Thursday day. Here is what to look out for.

Tech (2)

On Thursday, after market, Apple (AAPL) is expected to release 3Q EPS of $2.07 compared to $2.18 the prior year on revenue of approximately $52.3B vs. $53.8B last year. The company develops and produces consumer electronics and on its current analyst consensus rating is 29 buys, 10 holds and 5 sells, according to Bloomberg. 

From a technical point of view, on a daily chart, Apple's stock price has been relentlessly advancing since March 23rd and has been using the 20-day moving average as a strong support. On Thursday, July 23rd, price closed below the 20-day moving average support, a bearish signal. The RSI has been fading since mid-June, possibly showing bearish divergence, calling for caution. Price is currently holding just below the 20-day moving average. Since we are still in a bull market, we may see Apple's stock price chop around a bit before finding support at $355.00 and bouncing to retest the $384.00 level. If price can rise to the first resistance and break through it, we will likely see a push to retest the all time high at $400.00. However, if price cannot hold above $355.00, price will probably break below its 50-day moving average, a bearish signal that could send price back down to its $332.00 support. Since Apple is one of the big five companies holding up U.S. markets, a break below its 50-day moving average could have a large ripple effect on U.S. indices due to its market weight.       

Source: GAIN Capital, TradingView

On a weekly chart, Apple's stock price is currently in an ascending broadening wedge pattern that began to form in early to mid-2019. An ascending broadening wedge pattern is often a bearish pattern that could be signaling a reversal is soon to occur. The RSI has made a lower high, even though price made a higher high, again possible bearish divergence. Therefore caution should be taken when speculating in Apple at these current levels.

Source: GAIN Capital, TradingView

More from Earnings

Disclaimer: GAIN Capital UK Limited (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by Forex.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.