Apple (AAPL) is scheduled to announce its latest and greatest batch of the iPad today.
Of course, the Apple iPad has already been an epic success story for AAPL, as it more or less introduced a whole new segment to the personal computing market. While the competition has caught up and essentially pushed tablet computers into a commodity business, AAPL still has the baton when it comes to style.
Expectations around today’s new Apple iPad announcements range from a major body change to an embedded fingerprint technology to a possible gold iPad. Either way, today is a big product announcement event for AAPL, which is followed next Monday by Apple earnings.
In other words, Apple stock is now wedged between two major events, which makes trading AAPL trickier in the near-term.
Be Cautious With AAPL Stock
Last week, I mentioned that AAPL stock looks to have near-term upside before Apple earnings. The lateral area of attraction/resistance for AAPL stock that I discussed last week was around the $515 mark. That price offered resistance this summer in August and draws a horizontal line all the way back to January.
This AAPL attraction area has in the meantime been reached. From here, chasing Apple stock higher into the uncertainty of the two aforementioned events lends less than favorable odds for traders.
Sure, longer-term investors in Apple stock can take some comfort in the fact that AAPL has surpassed an eight-month resistance line. Still, long-term holders of AAPL stock may be wise to take some off the table to be safe, and wait for the uncertainty around the Apple earnings report to clear.
Through a closer-up lens, AAPL rallied just about 9% over the past eight trading days — a climb that essentially came on anticipation of both today’s iPad event and likely a good Apple earnings report early next week.
Thus, those involved in Apple stock with near-term timeframes would be wise to respect the possibility of a “sell the news” reaction. AAPL could easily re-test the $495 to $500 area.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free Weekly Market Outlook Video here. As of this writing, he did not hold a position in any of the aforementioned securities.