The numbers are in.
Action Alerts Plus holding Apple Inc. (AAPL) reported its fiscal first-quarter earnings numbers after the bell Thursday, posting record revenues and profits. The firm generated $88.3 billion in revenue for the quarter, an increase of 13% over last year's record revenues.
Earnings hit $3.89 a share, as Apple's active installed base of devices reached 1.3 billion worldwide.
Notably, the firm announced that it plans to take advantage of U.S. tax reform to repatriate its massive $163 billion cash hoard. Apple plans to bring that cash balance down to "near zero", putting that cash to work in a capital allocation plan that will be unveiled in April.
Apple rallied initially on its earnings results Thursday evening, but that upside gave way to selling at the start of Friday's trading session. Shares are down 1.75% Friday as of this writing.
But that selling comes with a silver lining -- it could be providing a can't-miss opportunity for buyers to step in and pull the trigger.
To break down that opportunity and figure out how to trade it, we're turning to Apple's chart for a technical look at the price action in this technology giant:
You don't need to be an expert trader to figure out what's happening in shares of Apple right now.
In fact, the price setup that's showing up in shares is about as basic as they get. Apple has been moving up and to the right in a well-defined uptrend for the last year now, bouncing higher on every test of trendline support in that timeframe.
So, as Apple tests that same support level for only the sixth time in the last 12 months, investors are staring down a can't-miss buying opportunity.
The key here is to wait for a bounce.
Waiting for a bounce off of trendline support in Apple is important for two key reasons: It's the spot where shares have the most room to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before the channel breaks, invalidating the upside trade). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring Apple can actually still catch a bid along that line before you put your money on shares.
The 200-day moving average is starting to act like a decent proxy for the bottom of Apple's price channel. From a risk-management standpoint, that makes it a logical place to park a protective stop if you decide to pull the trigger on Apple here.
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This article is commentary by an independent contributor. At the time of publication, the author was long Apple.