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Apple Earnings Preview: How to Trade the Stock’s Move

Apple stock is trading back toward the highs ahead of earnings. Here are the must-know levels ahead of the report.

Earnings season started a few weeks ago, but now the intensity is really increasing. Apple  (AAPL) - Get Apple Inc. (AAPL) Report will report on Tuesday after the close of trading, joining a number of other favorites among investors.

That includes Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report, Microsoft  (MSFT) - Get Microsoft Corporation (MSFT) Report and Alphabet  (GOOGL) - Get Alphabet Inc. Class A Report - and that’s just on Tuesday’s afternoon!

Expectations for Apple seem somewhat mixed. While the stock recently hit record highs, we’ve all been waiting for the stock to get moving for several quarters now.

Additionally, despite Apple absolutely crushing expectations in each of the last two earnings reports the stock has failed to rally. That has to dampen expectations a bit this time.

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Trading Apple Stock

Daily chart of Apple stock.

Daily chart of Apple stock.

We were fortunate enough to get bullish on Apple stock in mid-June, just as the stock was breaking out.

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Eventually that was enough to drive the stock to all-time highs as $150 has become clear resistance. After a sudden dip early last week, Apple stock is right back to this resistance level.

What can we expect on earnings?

Bulls are getting excited as the company gears up for its all-important second half of the year. However, despite strong earnings in each of the last two quarters, the stock has fallen flat.

If that happens again, I’m first looking for a dip toward the prior high at $145. If it fails, the 21-day moving average and last week’s low at $141.67 are on the table.

Below all of those measures and the $136 to $138 area may offer bulls a reasonable dip-buying opportunity.

On the upside, we need to see a close over $150. More specifically though, the 161.8% extension sits up at $159. Should we clear $160, that could pave the way to $173, then the $190s.

Some might say that this roadmap is not helpful - that they want to know what Apple will do before earnings. Sorry, but it doesn’t work that way. All we can do is react to the price action.

These are the levels I’m keeping on my radar for when Apple reports. I’d love for this name to dominate in the back half of 2021.