Shares fell from a 52-week high of $233.47 on Oct. 3 to a low of $142 on Jan. 3. This marked a decline of more than $90 per share as Apple tumbled 39.2% from peak to trough. Can it get back to those prior highs?
I think so. Posting a top- and bottom-line earnings beat on Tuesday evening will certainly help Apple stock in its journey back to those highs. So will the company's better-than-expected fiscal third-quarter guidance.
Let's look at the charts to see where Apple stock can go from here.
Trading Apple Stock
Some investors were worried about Apple stock going into earnings after seeing the 8% beating that Alphabet (GOOGL - Get Report) (GOOG - Get Report) took on Tuesday following its earnings release on Monday after the close. That's likely part of the reason Apple shares were lower going into the print.
In any regard, it worked out well, with the stock up about 4.9% to $210.52 so far on the day. That's a strong move for Apple and opens the door to further momentum in the days, weeks and potentially months to come. Of course, the stock is always susceptible to the broader market, which has to get through a Fed announcement later this afternoon and the jobs report this weekend. But bulls are growing optimistic as Apple will enter an iPhone upgrade cycle in the fall.
With Apple stock clearing this $210 to $212 range, it opens the door to the $221-ish level. Even though shares are overbought in the short term, a grind higher is certainly not out of the picture. With Wednesday's rally, Apple stock is also back above prior uptrend support (purple line).
If Apple stock wants to test its prior highs north of $232, it's imperative that it gets above and holds the $220 to $222 level. It doesn't have to happen immediately or in one big rally. In fact, a rally up to this area and an ensuing pullback would actually be quite healthy. It will allow AAPL stock to digest the move and give bulls an opportunity to buy the dip.So far, the 20-day moving average has been an excellent buying opportunity in 2019. Let's see if that remains the case going forward. On the downside, the 20-day is the must-hold level for me, and I would prefer to see Apple stock stay north of uptrend support.
Over $221 opens the door to a run at its prior all-time highs.