PreMarket Prep Stock Of The Day: Apple

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Apple Inc. AAPL is having one of its best days in months and is the PreMarket Prep Stock Of The Day.

What A Year: After ending 2019 at a split-adjusted price of $73.41, Apple made a new all-time high in January at $81.96 and matched that high in February, when it peaked at $81.81. Then came COVID-19.

Apple bottomed on the same day as the S&P 500 index on March 23 at $53.15. That low came in just below its October 2019 low ($53.78) and comfortably above its September 2019 low ($51.06).

From there it embarked on perhaps its best six-month rally in the history of the issue. That rally came to an abrupt end on Sept. 2, when it peaked at $137.18. The issue posted its all-time closing high the day prior at $134.18.

It should be noted that the peak in the issue came three days after its four-for-one stock split that took place after the close on Aug. 28. The closing price on the day prior to the split was $124.40 and has been a pesky level for the issue to clear since the split.

Post-Split Trading Range: During the September tech wreck, Apple swooned to $103.10 but quickly recovered. Since Nov. 4, the issue has been in a trading range from $112.35 to $125.98.

During that stretch, a majority of the price action took place between the $117 to $121 area. The lion’s share of the gain took place during a six-day rally (Nov. 23-Dec. 2) when it moved up from $113.85 to $123.08.

The Catalyst: Since Dec. 1, the issue has posted all of its closing prices in a range from $121.78 to $124.38. Interestingly, the low of that range took place in two of the past four sessions.

Before the open, a report said Apple will increase its iPhone production by 30% for the first half of 2021. Bulls in the issue had been waiting for a catalyst and seized on the opportunity. After a $2 higher open, it had a brief retreat to $124.13 and continued its move higher.

As of 12 p.m. ET, it reached $126.96 but has backed off to the $126.10 area. That high comes in just above its Aug. 28 high of $126.44, which happened to be the last day before its stock split.

Moving Forward: Today’s news and price action are attempting to push the issue above the top of its recent trading range. A close at the top of the range may be indicative of another leg higher. A breach of today’s current low ($124.13) may be indicative that the issue may revert back to its recent trading range.