Trading Strategies For Apple Stock Before And After Q2 Earnings

Apple Inc AAPL is set to print second-quarter financial results after the market closes Thursday. The stock was trading slightly lower heading into the event.

When the tech giant printed its first-quarter results on Feb. 2, the stock was volatile the following day but ended the session up 2.44%.

For that quarter, Apple reported an EPS of $1.88 on revenue of $117.154 billion. The company came in under the EPS estimate of $1.94 on revenues of $121.1 billion.

For the second quarter, analysts estimate that Apple will print earnings per share of $1.43 on revenues of $92.96 billion.

Ahead of the event, Rosenblatt analyst Barton Crockett reiterated a Buy rating on the stock and maintained a $173 price target. Read what the most accurate analysts are saying here...

From a technical analysis perspective, Apple’s stock looked bullish heading into the event, having formed the next possible higher low within an uptrend pattern on Thursday.

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Options traders, particularly those who are holding close-dated calls or puts, take on the extra risk because the institutions writing the options increase premiums to account for implied volatility.

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The Apple Chart: Apple has been trading in a consistent uptrend since March 2, making a series of higher highs and higher lows. Apple’s most recent higher high was formed on Wednesday at $170.92 and the most recent confirmed higher low was printed at the $162.80 mark on April 26.

• On Thursday, Apple gapped down, but bulls came in to buy the dip. If Apple receives a bullish reaction to its earnings print, Thursday’s low-of-day may serve as the next higher low within the pattern, making the uptrend likely to continue.
• If Apple suffers a bearish reaction to the news and falls under $162, the uptrend will be negated and a downtrend may be on the horizon. If that happens, the stock may find support, at least temporarily, at the 50-day simple moving average.
• Apple has resistance above at $167.88 and $171.03 and support below at $162.14 and $158.09.

Photo via Shutterstock.