Market Overview

Apple Is Right Back Where It Was 3 Months Ago

Apple Is Right Back Where It Was 3 Months Ago

Apple Inc. (NASDAQ: AAPL) shares are soared 7 percent Wednesday after the company delivered a huge Q3 earnings beat on Tuesday. It’s been a long three-month journey for Apple to once again breach the $100 level.

The journey started when Apple reported its first quarter of year-over-year negative iPhone sales back in April, and the stock gapped down 7 percent from around $104. Within weeks, Apple had set a new 52-week low at $89.47.

On May 16, Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) disclosed in a regulatory filing that it had taken a 9.8 million-share position in Apple. The brief dip below $90 proved to be the low point for the stock, as the market seemed to take the Buffett news as a buy signal.

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Still, even after the Buffett news, Apple attempted on three different occasions to make a sustained push above $100 only to be sold off each time. Finally, the big Q3 earnings beat sent the stock gapping up 7 percent on Wednesday morning in an almost perfectly inverse move to its Q2 sell-off. Incredibly, Wednesday's daily high of $104.35 is the exact level at which the stock last traded prior to its April gap-down.

When all was said and done, Apple stock is right back where it started prior to its Q2 earnings report.

Ironically, even though Buffett’s disclosure marked the bottom for Apple’s stock, Buffett remains in the red on his stake. Berkshire reportedly purchased Apple at an average price of around $109 per share, meaning that Buffett believes Apple has plenty more upside ahead in coming months.

From a technical standpoint, the key levels to watch at this point are $110 and $100. A push above $110 could mean that Apple could be on its way to re-test its all-time highs. A dip back below $100 could indicate that Apple's rallies are still being sold and the stocks bearish ways will continue.

Disclosure: the author holds no position in the stocks mentioned.

Posted-In: Earnings News Technicals Movers Trading Ideas Best of Benzinga


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