Thursday, July 19, 2012

Apple Inc.(NASDAQ:AAPL) Shares Approaching Towards Next Resistance

Shares of Apple Inc.(NASDAQ:AAPL) are outperforming on Thursday and soared $6.71 or 1.10% to $612.96 as investors are betting on the company’s upcoming third quarterly earnings next week.

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One should note that the stock is approaching towards its near term resistance of $618, which was its peak after the company reported its second quarter earnings in April, 2012. In the past three months, the stock has created a bullish chart pattern with higher tops and higher bottoms. The stock is trading well above its 50-Day Moving Average and 200-Day Moving Average of $585.17 and $548.14 respectively.

However, apart from technical point of view, investors should continue to focus on earnings, which are scheduled to be announced on Jul 23, 2012. Analysts are estimating the company to earn as much as $10.38 a share, up sharply from a year ago profit of $7.79 a share. Revenue is estimates to grow by 30.70% year over year to $37.34 billion.


Apple has always been under rumor radar with latest rumor circulating that the company has been working on iPad mini and may release it by October. The report also suggests that AAPL was in talks to develop a smaller iPad, since the introduction of the first generation even with Steve Jobs saying that a screen that small wasn’t ideal for users to enjoy their media. Analyst at Pacific Crest Securities said the new launch "is going to be huge,"

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Also, there are several rumors about the company’s upcoming iPhone5, where online bloggers are forecasting additional features and images.

Well, in the past the company has beaten analysts’ estimates in past three quarter out of four quarters. However, this time analysts believe that expectations are too high and Apple may not meet the Wall Street’s target. Well, what if the company reports lower than estimated earnings? The stock will fall…but this is not going to be the end for Apple as the company has several products to release later this year. So if the stock falls anytime, it could be a buying opportunity.

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