The Technical Setup Into Apple's Q4 Earnings Release

With Apple, Inc. AAPL set to report fiscal fourth-quarter earnings Thursday, traders are taking one last look at the stock’s chart for any indication of what to expect from Apple and how to play the stock following its report.

Gordon’s Take

While other tech stocks have taken a major beating in recent weeks, Apple has held up relatively well, dropping only about 8.5 percent from its all-time intraday high of $233.47 earlier this month.

On a recent episode of PreMarket Prep, Todd Gordon, CNBC Contributor and founder of Trading Analysis, discussed Apple’s resilience.

“It shows great relative strength in here. I know there’s a lot of questionable things about Apple in the news cycle, but the stock continues to act really well and it’s something I’m trading shorter-term and I want to hold longer-term as well,” Gordon said Oct. 26.

Apple hasn’t completely avoided the October market swoon, but it has undoubtedly been a market leader in recent weeks. Over the past three months, Apple shares are up 11.6 percent compared to an overall decline of 5.7 percent for the S&P 500.

Key Technical Levels

If Apple beats earnings expectations, the first potential level of resistance would be the 50-day simple moving average, currently at about $221. Above $221, the next potential resistance is around $224, where the stock stalled for three consecutive days from Oct. 22 through Oct. 24.

If the stock breaks lower following earnings, there is major support in the $190 to $195 region. The 200-day SMA, which has previously provided support in February and April, is currently at about $191. In addition, $195 was previously resistance in June and July before the stock gapped higher following Q2 earnings. A dip back down to the low $190s could also serve to close that previous earnings gap.

As of 3:25 p.m ET Wednesday, Apple traded around $219.90 per share.

Listen to the full interview with Todd Gordon at 32:45 in the podcast of the show below

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.
 

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