Late Thursday, Apple Inc. (AAPL​) released a positive quarterly report, beating the street on sales ($52.6 billion vs. expectations of $50.5 billion) and earnings per share ($2.07 vs. $1.87). Sales and profits rose 12% and 24%  year over year respectively. For the coming big holiday quarter, Apple guided sales expectations of $84 billion to $87 billion, up 9% year over year.

Sales momentum over year is expected to slow in the coming quarter, likely due to a lukewarm reception for the iPhone 8 and supply constraints on the apparently more popular and buzzier iPhoneX that launches today.

At this point, traders don’t appear to be too concerned about the short-term growth prospects as Apple shares broke out over $170 in aftermarket trading Thursday and rallied to an all-time high. This action suggests that traders are thinking iPhone X sales could continue to ramp up into 2018 as more phones become available.

Chart source: TradingView

A flurry of activity at Friday's open is likely on this news, but the big question is whether Apple shares can sustain the gains through the day and post a positive weekly close, or if some traders could start to take profits ahead of the weekend. A Friday close above $170 and even the $165 recent breakout point would confirm the start of a new upleg on trend. A reversal below $165 could be seen as a sign of exhaustion and reversal.

The Bottom Line

Apple recently broke out of a $150 to $165 trading channel but had been looking a bit vulnerable with the RSI indicator getting overbought and a bearish engulfing candle appearing, but these were negated by Thursday's aftermarket surge. Based on this channel, the next upside measured resistance may appear near $180. Additional support may appear near $155 where the recent rally lifted off from.

For more trading insights, please visit our website.


CMC Markets is an execution-only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities. This material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. CFD and FX trading with CMC Markets is only available in jurisdictions in which CMC is registered or exempt from registration. CMC Markets neither solicits nor accepts business or accounts from residents of the United States of America.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.