Apple Stock Price and Forecast: Has AAPL taken a bite out of this bear market?

Apple set up Friday's market turnaround with superb results.
AAPL beat on top and bottom lines after the close on Thursday.
Facebook, Google and Amazon could continue the change in sentiment.

Ivan Brian FXStreet

We had touched on the possibility of Apple (AAPL) turning the entire market sentiment around on Wednesday and Thursday during the regular session. Given its status as the biggest company in the world and index leader, it was not that unique an observation. Nonetheless, it generated a bit of newsworthiness for us. It always helps when it turns out your prediction was correct, and sure enough Apple and then a largely inline inflation reading led to a relief rally.

This may be a dead cat bounce or just a confirmation of the latest dip. This week assumes even greater significance then. Big tech completes their earnings season when Facebook (FB) Google (GOOGL) and Amazon (AMZN) all report, and then it is on to Friday’s employment report. Get through that, and maybe the market forgets January to look ahead with optimism.

Apple Stock News

Apple certainly did its bit with a strong earnings report. Earnings per share (EPS) came in at $2.10 versus the average estimate of $1.88. Revenue also beat estimates, hitting $123.9 billion versus $118.28 billion. The closely watched iPhone revenue number hit $71.63 billion and represents just under 58% of Apple's total revenue. Gross margins increased from 39.8% to 43.8% yearly. On the conference call post-earnings, CEO Tim Cook said he sees this margin remaining strong in Q2 2022 to 43% at the midpoint of projections.

The stock immediately rose 2% in afterhours trading and added another 2% by the time the market opened on Friday. In a neat bit of symmetry, another 2% was then tacked on for most of the day before a late surge added another 1% to the close and Apple stock finished Friday up a significant 7%.

Apple Stock Forecast

This is exciting from a technical perspective. Apple had found support almost perfectly at our $157 level. This was the last high from September. Once this had slowed in the autumn, we entered some choppy sessions as buyers and sellers fought for price discovery and eventual domination. With the earnings report, sellers backed away. For now, $157 has been defended. In the process buyers also took out key resistance at $167. For this move to follow through, Apple needs to hold $164 and push on to the small resistance at $177. This will set the scene for a push to record highs.

Apple (AAPL) chart, daily

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Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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