Apple Q1 earnings preview

Apple Q1 earnings are due after the close on Wednesday. Expectations are for a stellar quarter as the stock price trades around its all time high.

Apple

When
Wednesday 27th January, after the market close

The only way is up
Apple will report Q1 earnings after hitting a fresh all time high of over $145 earlier in the week after Wedbush upped it price target to $170. 
The stock has had a phenomenal 2020, more than doubling since the mid March lows as demand for Apple products and services soared through the pandemic and despite a major anti-trust lawsuit filed by the US Justice Department against Alphabet which could impact the lucrative Apple – Alphabet partnership.

Hardware - stellar quarter?
Q1 is typically a strong quarter for revenue thanks to holiday sales and owing to the first full quarter of the news iPhone sales. 12th generation iPhone sales are expected to be impressive, in addition to sales of Macs given the WFH and remote working climate.

Services 
Services will also be closely watched as the company attempts to pivot more towards services. The services include streaming services such as movie and entertainment Apple +, video game seller Apple Arcade, Apple Pay and other services. Attention will be on the Apple One bundle and also its fitness package. The services revenue tends to be more predictable and stable than the hardware numbers  and boasts stronger margins.

Expectations
EPS $1.39 on Revenue $102.62 billion vs EPS $1.25 & Revenue $88.5 in the same period a year earlier.

Apple technical analysis
Apple has surged 80% across the year and hit a fresh all time high if $145 earlier this week.

It trades in a series of higher highs and higher lows and also above its 50 & 100 sma on the daily chart indicating a well-established bullish trend.

The RSI is supportive of further gains whilst it remains above 50 but under the key overbought level of 70.

Whilst the price has eased back mildly today, the uptrend is still firmly intact with immediate resistance at 145, beyond which $150 round number could come into play. 

Support can be seen as $125, the confluence if horizontal support and the 50 sma.

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