Apple Stock Acting Eager as Earnings Approach

by Serge Berger | October 15, 2013 11:59 am

Earlier this morning, Apple (AAPL[1]) announced that it is hiring Burberry (BURBY[2]) CEO Angela Ahrendts as senior vice president of retail and online stores[3]. Given the company’s focus around its retail store experience, this clearly is an important hire, although it’s debatable whether this is a news flash worthy of truly moving Apple stock. (I tend to think it’s not.)

But from a bigger-picture point of view, it shows the continued commitment at AAPL to constantly improve — and to some extent, pioneer/evolve — the new retail experience.

When I last discussed Apple stock charts[4], AAPL had just completed a choppy V-shaped dip and recovery following its Sept. 10 announcement of new iPhones.

Bigger-picture, looking back to September 2012 — where Apple stock topped and began a seven-month decline — AAPL developed a solid medium-term bottoming formation with a low in April and a marginally higher low in June. From there, it began to systematically work itself higher, and in July, Apple stock broke a multimonth downtrend, which brought the stock into a lateral resistance area that dates back to January, around the $515 mark.  However, this resistance area remains to be overcome — AAPL rejected the level and instead moved lower into the mid-September low, which served as a retest of the prior diagonal resistance line discussed above.

In the medium-term, Apple stock is thus stuck between roughly $440 and $515, although AAPL increasingly looks like it wants to make an attempt to throw itself over the $515 area.

aapl 12 mont
Click to Enlarge

Much more near-term, my line in the sand for a long-side play in AAPL was $492, which shares overcame last Friday. From here, odds and momentum favor a push past the diagonal resistance line from August, marked on the daily Apple stock chart below.

aapl daily
Click to Enlarge

With earnings still nine trading days away, quicker traders might be able to take advantage of near-term upside momentum in AAPL while medium-term investors might want to wait for earnings to pass and evaluate.

Still, everyone should keep the underlying bullish tendencies in Apple stock in the back of their minds.

Serge Berger is the head trader and investment strategist for The Steady Trader[5]. Sign up for his free Weekly Market Outlook Video here[6]. As of this writing, he did not hold a position in any of the aforementioned securities.

  1. AAPL:
  2. BURBY:
  3. senior vice president of retail and online stores:
  4. Apple stock charts:
  5. The Steady Trader:
  6. free Weekly Market Outlook Video here:

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