Apple Inc. (NASDAQ:AAPL) — This major provider of computer hardware (iPhone smartphones, iPad tablets, Mac computers, etc.) appears to have an ever-evolving market for new consumer products. But, as noted in the Nov. 9, 2016, Trade of the Day, many of the products are merely revisions of old designs — for example: A “thinner iPhone,” a “better Siri,” a “thinner MacBook.”
“The new iPhone 7 has no headphone jack? And who needs a 5.5 inch display, unveiled at the iPhone’s last refreshment in 2014.” Despite the shortcomings of the iPhone, yesterday’s earnings beat estimates, and according to analyst Therese Poletti of 蜜桃传媒Watch, the growth was fueled by a return to the iPhone to the exclusion of other products. Software and services grew with revenue growth of 18%, driven by growth in the Apple App Store. (See Daily Trader’s Alert for earnings and revenue report.) Standard & Poor’s recently raised their price target to $140 from $130 prior to yesterday’s report.
Following a triple bottom in July 2016, AAPL stock broke resistance at about $110, then quickly took out the October 2016 top at $118, which now is the first line of support. Immediate resistance at $123 was made in November 2015 and so is not shown on this chart.
High-volume profit-taking preceded yesterday’s earnings, and MACD has been flat since early in December. A break above $123 could result in the stock’s run to S&P’s target at $140, but chasing AAPL stock after earnings are announced could also result in a whipsaw back to $118 or lower where traders may want to take positions.
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