Apple (NASDAQ 🙂 publishes its business report card for the second quarter after market closure today. Analysts predict that the iPhone maker will achieve a $ 2.37 earnings per share of $ 57.58 billion compared to last year's $ 2.73 earnings per share, which beats its $ 2.69 estimate. But it was somewhat disappointed with the revenue and booked $ 61.14 billion, just outside the expectation of $ 61.15 billion. Although the company has missed the occasional revenue forecast, it has 21 times the last 22 quarters the expectations of the EPS reports.
But enough, and income issues can strike hard, as the Google Alphabet (NASDAQ 🙂 showed in yesterday's aftermarket and today's pre-market
.
Technically, we see similar weaknesses in Apple's charts as we saw in Alphabet & # 39; s.
AAPL Daily Chart
The prize trades within an ascending channel, with the 50 DMA winning over the 200 DMA and on course to activate a gold cross. Meanwhile, the shooting star on Wednesday signaled a slump after approaching the channel.
Confirmation for at least one channel bottom correction comes from both the ADX and an MA-based trend strength indicator, as well as from the more popular momentum-based RSI, after reaching the extreme oversold level of 80 for the second time in so many months.
AAPL Weekly chart
The weekly chart shows an interesting negative correlation between the lagging price-based ADX indicator and the leading momentum-based RSI. The RSI has flattened out at its own resistance level – below the peak at the end of August and above the peak moments of May-June – in a negative deviation from the price that climbed on top for four weeks. That price progress has been weakened by last week's falling star, which reinforces Wednesday's daily shooting star.
Unlike the plateauing of the RSI, the ADX continues to climb, due to the increasing power of the current upward trend. Note, however, that it is approaching the low point of November-December. Will that act as a resistance – assuming the usual cutting psychology that takes place when a prize returns to a previous point of failure? If investors actually increase the offer, that would coincide nicely with the heads-up of the weakening momentum that the RSI has offered us over the past two weeks.
Therefore, we expect the bottom of the channel to be withdrawn, supported by the 200 DMA.
Trade Strategies
Conservative traders have to wait with a long position for a return movement to the bottom of the channel or for the upper limit of the channel to blow, with a return movement to demonstrate support above the cartridge.
Moderate traders may purchase a pullback toward the channel bottom for better access but not necessarily for proof of pattern integrity.
Aggressive traders can short-circuit with a return movement to the falling star of Wednesday or below that of yesterday.
Trade sample – short
Admission: $ 205
Stop-Loss: $ 206, above the high price of yesterday
Risk: $ 1
Target: $ 202, low yesterday
Reward: $ 3
Risk-Reward Ratio: 1: 3
