Apple stock roars back with a 2.6% gain on Tuesday.
AAPL had made new highs but suffered on Monday.
Apple releases earnings next week on July 27.

Apple shares roared back to life on Tuesday with a gain of over 2% and in the process retook some key technical levels. The move to record highs has been a nice steady uptrend breaking key technical levels identified at FXStreet. The move was triggered by relative underperformance in April and May and by a turnaround in the Nasdaq and big tech stocks. Other FAANG names had made new highs such as Facebook (FB) and Alphabet (GOOGL) but AAPL had lagged behind. Once the key $135 level was broken the move was able to accelerate due to a lack of resistance and a lack of volume.

Apple traded up to $150 and stalled. It is funny how often markets stall or target round numbers and this time was no different. Markets are dominated by human emotions (despite the rise of algorithms) and humans like symmetry and hence round numbers. Apple traded up to $150 and then came crashing back.

Apple key statistics

Market Cap
$2.44 trillion
Enterprise Value
$2.1 trillion
Price/Earnings (P/E)
32

Price/Book

38
Price/Sales
9
Gross Margin
0.4
Net Margin
0.23
EBITDA
$100 billion
Average Wall Street rating and price target
Buy $159

Tuesdays call here at FXStreet “Tuesday is likely to see a bounce after Monday’s sharp falls and a break of the 9-day moving average would be an opportunity to get long Apple stock again. Just use a stop or some form of risk management as this is not a strong risk-reward trade. Ahead of earnings next week the direction is likely to be choppy. Keep an eye also on the Moving Average Convergence Divergence (MACD) as it appears to be about to crossover, which is a bearish signal.”

This worked out well as Apple broke the 9-day moving average and continued higher. So now what you ask? Earnings next week are still likely to see continued choppiness so taking a longer term view is more difficult. News has just hit the wires that Apple is to lauch a budget 5G phone in early 2022 and appears to be moving all models away from 4G. But until we ahve some clarity from results we will take cautious positions if any.

The trade yesterday worked well but this was a short term scalping opportunity. Now the picture is less clear.

1. A gap had been created from Friday to Monday and this has now been filled.

2. The Moving Average Convergence Divergence (MACD) remain poised to cross into bearish territory so keep a clsoe eye on this.

3. Earnings next week so direction will be choppy until then.

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