Apple Inc. (AAPL​) is arguably the most popular stock on the planet. It is the brand for luxury technology, and the latest focus is on the tenth anniversary iPhone X. All the bells and whistles validate strong pre-orders despite a price tag above a grand. The hype of this genius smartphone had the stock setting an all-time intraday high of $169.94 set on Wednesday. However, the stock closed below Tuesday's low of $166.94, defining a daily "key reversal."

Analysts expect Apple to post earnings per share between $1.72 and $1.93 when it reports results after the closing bell on Thursday. The stock is not as cheap as it used to be, as its P/E ratio is 18.88 with a dividend yield of just 1.50%. This stock was cheap when its P/E ratio was 12.00 in mid-2016. (See also: Why Investors Should Sell Apple on Earnings: BK Asset.)

On average, iPhone sales account for 50% to 60% of Apple's quarterly revenue. This notion will be put to a test as the iPhone X is scheduled for launch on Friday with a long list of anxious buyers. The wait for this technology gem may have dragged sales of the iPhone 8 models, which began selling on Sept. 22. Discounts on the older iPhone 7 models may have seen demand from growing overseas markets such as China and India. Investor bean-counting of iPhone sales should focus on the 46.4 million threshold, with related revenue of $29.6 billion, up 5.2% year over year.

The weekly chart for Apple

Technical chart showing the performance of Apple Inc. (AAPL) stockCourtesy of MetaStock Xenith

The weekly chart for Apple is positive, with the stock above its five-week modified moving average of $159.29. The 200-week simple moving average, or the "reversion to the mean," is $114.69, last tested during the week of July 1, 2016, when the average was $93.31. The 12 x 3 x 3 weekly slow stochastic reading is projected to rise to 63.09 this week, up from 57.70 on Oct. 27.

Given this chart, my trading strategy is to buy weakness to my annual pivot of $151.69 and to my quarterly value level of $141.84, and to reduce holdings on strength to my monthly and semiannual risky levels of $171.68 and $173.25, respectively. If there's a price gap above $173.25, there's an 85% chance of Apple shares returning to $173.25 by the end of the year. (For additional reading, check out: Apple's Brightening Profit Outlook Could Drive Techs Higher.)

 

     

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