Is Apple’s Fall After Earnings a Buying Opportunity?


Apple is falling after reporting. Shares are now down about 20% from the all-time high. Is it time to purchase the stock?

Apple ( AAPL) – Get Report shares were under pressure Friday, down about 5%. It’s not the response that bulls were expecting after the company reported incomes.

After the close of trading Thursday, Apple reported a leading- and bottom-line beat.

However, frustrating iPhone sales left investors a bit cautious, even though the business just recently rolled out its brand-new lineup of 5G gadgets.

The tone on Wall Street is much different than it was a few months back. The last time Apple, Facebook ( FB) – Get Report and Amazon ( AMZN) – Get Report all reported on the same evening (in July) it started a massive rally that moved the Nasdaq to brand-new heights.

Now in spite of strong arise from the trio, all 3 are lower by 4% to 6% on the day. Is this a dip to buy in Apple?

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Trading Apple

Apple continues to trade within its post-earnings wedge from July. Currently, shares are dipping into wedge assistance, as well as the 100-day moving average.

Should support stop working in the coming days – keep in mind the presidential election is Tuesday and the U.S. nonfarm payrolls report is Friday – it opens up the $103 to $105 area.

This zone filled the very first of two post-earnings gap-up sessions from July. It also marks the September low, at $103.10, which came after a sharp correction off the highs as Apple stock dipped more than 23%.

Below this location and Apple could set up as a very attractive dip-buying opportunity. If it fills the other post-earnings gap near $96 and possibly overshoots down to the 200-day moving typical near $90, financiers likely have a fantastic opportunity in front of them.

Evaluating the 200-day moving average would put Apple down by roughly 34% from the highs. I do not know if we get there, but it’s a good level to know simply in case.

For bulls to restore momentum on the benefit, they need to see Apple stock recover the 50-day moving average. This moving average has been resistance considering that mid-October and should Apple stop working to reclaim it, it’s likely to continue as resistance in the brief term.

If Apple gets above this mark and wedge resistance, it can start to rally. It will put the October high in play near $125, followed by a potential test of the all-time high up near $138.

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