Can Apple Stock Hit New All-Time Highs on Earnings Beat?

Apple stock is rallying after the company beat on earnings and revenue. Can AAPL stock continue to new highs now?
By Bret Kenwell ,

Apple (AAPL) - Get Report stock acted as a beacon of strength on Wednesday, with shares closing higher by 2.04% at $213.04.

The action comes after the company's better-than-expected fiscal third-quarter earnings and ahead of the Federal Reserve's interest rate decision later this afternoon.

The rally has Apple stock trading at its highest levels of the year, but still below its 52-week highs of $233.47. That mark is currently 7% above current levels, but with momentum back on Apple's side, some investors feel the stock can get there sooner rather than later.

The company reported earnings of $2.18 per share, which came in 8 cents ahead of consensus expectations. Revenue of $53.8 billion grew just 1% year-over-year, but topped analysts' estimates by almost $400 million.

Revenue guidance for next quarter came in at a range of $61 billion to $64 billion, with the bottom of the range topping the consensus view for $60.9 billion in sales. Management says non-iPhone segments are driving the gain, as Wearables growth climbed 50% year-over-year and momentum in Services continued.

Given the strong fourth-quarter guidance, investors are hopeful that the stock can maintain momentum going forward.

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Trading Apple Stock

Apple stock has been trending higher since its rapid bounce in June. With Wednesday's move, shares are now over the $215 level and over prior channel resistance (blue line). You may notice that the stock reported good earnings last quarter too, but it came right before the trade situation with China quickly deteriorated. 

That sent shares from ~$215 all the way down to $170.27, an unjustified hammering of 20%.

Now back over $215 and channel resistance, though, investors will look to push AAPL stock over the $220 to $222 area. If they can, bulls will certainly look to carry Apple stock up to its prior highs north of $230.

Will the trade war and/or the Fed derail Apple's post-earnings rally yet again? It's possible. If the stock does start to break down and falls below its 20-day moving and prior trading channel, look for the $195 to $198.50 area, as well as the 50-day moving average to buoy the name. Apple's 38.2% retracement comes into play near $198.50, too.

A number of firms have already upgraded or increased their price targets after Apple's earnings report. Two in particular stood out, with Citigroup analysts raising their price target from $205 to $250 and Canaccord analysts raising their target from $202 to $240.

Here's what the rest of Wall Street is saying.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.

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