Apple Stock Price: Goldman upgrades as Apple (AAPL) smashes earnings, chart turns bullish

Apple (NASDAQ: AAPL) reported Q1 2021 earnings after the market closed on Wednesday and the company lived up to its reputation. Apple easily beat analyst estimates, posting earnings per share of $1.40 versus forecasts for $0.99. Apple revenue came in for the first quarter at $89.58 billion versus a forecast of $77.36 billion. So not really a beat but a smash and grab. Understandably the shares rallied after the release, and Apple shares are currently trading at $137.08, up nearly 3%.

Apple also raised its dividend and added a cool $90 billion to its buyback program.

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Apple (AAPL) stock price forecast

The daily chart for Apple has seen a strong recent uptrend from the lows in late March. This move has been nicely held up by the 9-day moving average. Apple shares were waiting for direction, sitting on the 9-day moving average as the Q1 results were released, but now have powered higher in a bullish move.

The Moving Average Convergence Divergence (MACD) has come dangerously close to giving a sell signal, but the price action in the premarket should now see this fail. The Relative Strength Index (RSI) and the Williams oscillator are both in neutral territory, so there is nothing to worry about in terms of overbought or sold conditions. The Directional Movement Index (DMI) remains in bullish territory, and the yellow average line is showing the trend strengthening. A value above 25 indicates trend strength.

Clearly, we can now see from the daily chart the first and second consolidation phases that the Apple share price has gone through recently. This daily chart has not updated to show premarket pricing, but Apple at $137 points to the AAPL share price already breaking out of the second consolidation phase. The target is, therefore, to recapture the $145 high from January.

Remaining above $137 also takes Apple higher than the breakdown range from February, meaning it is firmly ready to push higher. 

The strategy offering the highest risk reward is to be long, stay long or get long. Any pullback to $135.51 can be used to initiate longs. Further support is given by the 9-day moving average at $133.45. A break of this may be used to exit positions as the trend would be questionable or bearish. These levels are of course for short-term traders.

The broader macro environment remains supportive post Jerome Powell and the Fed on Wednesday. Equity markets continue to set record highs, hence being on the long side is currently the higher risk-reward strategy.

A long-call strategy can also work well as investors know the maximum risk. May '21 $140 calls are trading near $2.20 per share (option contracts cover 100 shares).

As always, manage risk carefully and watch price movements to know when the sentiment has changed.

At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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