In looking at Apple (AAPL) last week, I anticipated a bit of follow-through buying. That didn’t happen, and now AAPL stock is in wait-and-see mode before Apple’s earnings report on Monday.
There’s not much to do from a swing trading perspective; all follow-through buying attempts of late have fizzled. Patience is part of the game of trading and investing. I have to remind myself daily that a healthy attitude toward this business means 1) understanding the degree of patience necessary; and 2) acknowledging and accepting the inevitable losing trades along the way (and viewing those trades as the cost of doing business).
With all that in mind, let’s walk through AAPL stock’s chart and see what levels we can map out for potential trades after Apple earnings are out on Monday.
Thursday we learned that Carl Icahn increased his stake in AAPL stock to $3.6 billion, and rumors began swirling that Apple will come out with larger-screen iPhones in 2014. AAPL stock rose 0.85% on the day in response. That’s no rally to write home about, but it did slide the stock back to more neutral territory ahead of earnings.
On the daily chart below I mapped out my first two support and resistance levels that I will be focusing on after Apple’s earnings report on Monday.
- Resistance 1: This is right here, right now, around the $557 – $558 area. A break above there could quickly bring the stock toward Resistance 2.
- Resistance 2: This is made up of the diagonal resistance line from early December, and comes in around $567. A break above here opens the stock up toward $580 – $590.
- Support 1: This is the July uptrend, currently near $540, a break below which puts the stock into medium-term neutral territory, unless…
- Support 2: … it also breaks below support 2, which is a lateral confluence area around the $500 mark, give or take 10 bucks on either side. A break below here puts the stock into medium-term negative territory.
I hope these support levels help to map out a trading plan for post-earnings, and to give some perspective on the current crossroads of AAPL stock.
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Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the Essence of Swing Trading e-book by clicking here. As of this writing, he did not hold a position in any of the aforementioned securities.
