May 24, 2022

StrategisChhr

Skillful Business Crafters

Can AAPL earnings provide the catalyst for another rally?

  • Apple and the Nasdaq both rally despite yields joining the move higher.
  • NASDAQ finishes in the green on Friday as AAPL closes up 0.5%.
  • Apple stock is set to report earnings on January 27.

Apple (AAPL) stock continues to trade cautiously and for the most part sideways ahead of earnings next week. The NASDAQ did make the most headway on Friday despite yields rising, and this helped Apple move slightly higher to end the day at $173.07 for a small gain of 0.5%. 

Apple Stock News

Apple will report earnings next week on January 27 in what is the most anticipated of earnings releases by institutional and retail investors. Earnings per share (EPS) is expected to come in at $1.89, while revenue is expected to reach $118.8 billion. However, ahead of the earnings release AppleInsider.com quotes a note from JPMorgan saying the investment bank expects Apple to beat consensus and break its holiday quarter records. The last set of earnings were good, but Apple did have supply chain issues and this will likely be the main area of focus for investors this time around. JPMorgan sees iPhone shipments coming in at 83 million units while Wall street looks for 82 million. JPMorgan put a $210 price target on Apple. 

Bullish, yes, but then Apple has beaten earnings estimates for the past three years apart from the small revenue miss last time around. The House of Morgan is not exactly sticking their neck out with this one. 

Apple Stock Forecast

In order to push the stock, the beat will need to be bigger than that outlined by JPMorgan. Markets are not as strong as last year, and the tech sector, in particular, is having a hard time consolidating any gains. The key is the double bottom established at $167.63.

Double bottoms are bullish formations, so there is the possibility of strong earnings pushing Apple to target. The target of a double bottom is the range from the bottom to the first peak, in this case a $16 range from the all-time high at $182.94 giving Apple a target of $198.94. Let us just call it an even $200, as the number will be too hard to avoid if we get that close. Breaking $167 sees a volume gap until $148 with support at $157 and $153 on the way. While the double bottom is bullish, there is a bearish divergence in the Relative Strength Index (RSI) from the $182.94 high in late December. 

Apple (AAPL) chart, daily

 

 


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