APPLE: POST EARNINGS - 1.42EPS & $42.4BN BEAT - UP 8% @ 103.5 PM
Apple beat expectations marginally at 42.4bn and 1.42EPS.
Apple reported not outstanding results, but nonetheless, the earnings call from Tim Cook et al. gave Apple the momentum to break the 101 resistance level and we closed post market up at the last low 100 resistance level at 103.5 (filled the low 100's resistance gap in).
Today the market will go either way -
1) With more liquidity backing the move break-out to the 104's - from here I would advise buying with a target of 110-112.
- Signs of this move would be a bullish pre-market e.g. 104-5; I would advise buying this level ASAP OR risk-averse traders could wait and see if we get a pullback into the 103.8 resistance level at some point after the rally as a recovery leg of the move higher which would be almost inevitable
2) and my preferred prediction is that more liquidity brings us back down to at least the previous resistance level at 101 before then moving higher in the next few days to break-out the 104 and trade towards 110, as IMO 103.4 is high relative to the results - yes they just beat estimates but IMO the estimates were very low and i infact expected more. Nonetheless, given apples depression and even at 110 trading 20% down I can easily see this becoming a recovery rally to the 112 level before reversing (especially as the Nasdaq continues to make new 12m highs on its way to ATH). BOJ on friday is something to watch out for though - a miss will likely turn risk markets sour and take the carpet from under apples feet say if it was at 107.
- Signs of this will obviously be a quiet pre-market or a bearish pre-market e.g. trading at 103 flat, then when market opens we see a cascade of old TPs move us to the 101 level where supply/ demand stabilises. Or simply in pre-market we've already moved to 101 and are ticking along. IMO if this is the case it is best to see if we can get a 102/104(breakout) before buying as at 101 we run the risk of breaking lower (as we have seen apple break lower from 101 several times).
3) Also it is possible that the market sees apple as expensive at 103/4 so sells off straight through the 101 resistance say to low 99/100's - this imo is a bearish setup and i dont think Apple will plan on having any upside momentum going forward e.g. no 104 breakout if today in pre/ normal market we see 100 or less.
- Signs of this will obviously be a sell-off from the 103.5 post market to the 100 level in pre/normal market. Here I have no interest in buying as i expect apple to move back into the 90's with time - also you have to remember even a sell-off to the 100s shows apple up 4% as it closed at $96 yesterday.
Personal Note:
I have long been an apple bull so i like the topside possibilities but equally Apple has struggled of late to hold onto gains/ rally. that said, the time to rally would be now (on target earnings/ bull market/ upbeat earnings call/ broken initial resistance levels) - it would have been nice to see apple trade through the final level at 104 which is the last highly restrictive technical level left, but the fact it held means we have to be vigilant - read the above and make smart decisions.
Apple reported not outstanding results, but nonetheless, the earnings call from Tim Cook et al. gave Apple the momentum to break the 101 resistance level and we closed post market up at the last low 100 resistance level at 103.5 (filled the low 100's resistance gap in).
Today the market will go either way -
1) With more liquidity backing the move break-out to the 104's - from here I would advise buying with a target of 110-112.
- Signs of this move would be a bullish pre-market e.g. 104-5; I would advise buying this level ASAP OR risk-averse traders could wait and see if we get a pullback into the 103.8 resistance level at some point after the rally as a recovery leg of the move higher which would be almost inevitable
2) and my preferred prediction is that more liquidity brings us back down to at least the previous resistance level at 101 before then moving higher in the next few days to break-out the 104 and trade towards 110, as IMO 103.4 is high relative to the results - yes they just beat estimates but IMO the estimates were very low and i infact expected more. Nonetheless, given apples depression and even at 110 trading 20% down I can easily see this becoming a recovery rally to the 112 level before reversing (especially as the Nasdaq continues to make new 12m highs on its way to ATH). BOJ on friday is something to watch out for though - a miss will likely turn risk markets sour and take the carpet from under apples feet say if it was at 107.
- Signs of this will obviously be a quiet pre-market or a bearish pre-market e.g. trading at 103 flat, then when market opens we see a cascade of old TPs move us to the 101 level where supply/ demand stabilises. Or simply in pre-market we've already moved to 101 and are ticking along. IMO if this is the case it is best to see if we can get a 102/104(breakout) before buying as at 101 we run the risk of breaking lower (as we have seen apple break lower from 101 several times).
3) Also it is possible that the market sees apple as expensive at 103/4 so sells off straight through the 101 resistance say to low 99/100's - this imo is a bearish setup and i dont think Apple will plan on having any upside momentum going forward e.g. no 104 breakout if today in pre/ normal market we see 100 or less.
- Signs of this will obviously be a sell-off from the 103.5 post market to the 100 level in pre/normal market. Here I have no interest in buying as i expect apple to move back into the 90's with time - also you have to remember even a sell-off to the 100s shows apple up 4% as it closed at $96 yesterday.
Personal Note:
I have long been an apple bull so i like the topside possibilities but equally Apple has struggled of late to hold onto gains/ rally. that said, the time to rally would be now (on target earnings/ bull market/ upbeat earnings call/ broken initial resistance levels) - it would have been nice to see apple trade through the final level at 104 which is the last highly restrictive technical level left, but the fact it held means we have to be vigilant - read the above and make smart decisions.
