Apple Inc. (NASDAQ: AAPL) has navigated through volatile trading waters in the early months of the year, witnessing a 4.35% dip in its share price year-to-date. Despite this, its latest quarterly earnings report revealed impressive results. Revenue surged to $119.6 billion from the previous $117.2 billion, translating to earnings per share (EPS) of $2.18, up from $1.88 in the same quarter last year. Notably, iPhone sales, an area of concern in recent times, amounted to $69.7 billion, surpassing the previous $65.8 billion. Analysts foresee a gradual uptick in iPhone sales this year, particularly as demand stabilizes in crucial markets like China.
Although Apple’s 19.69% return over the past year trails behind some tech peers such as Nvidia (239.18%), Meta (163.77%), and Google (54.88%), it retains its position as the world’s second-largest company by market capitalization. Its impressive 10-year return of 847.08% underscores its consistent ability to deliver substantial returns to shareholders over the long haul.
Technical
On the daily chart, a breakout occurred from a falling wedge pattern. However, that rally has reached a peak, resulting in choppy price action as the market anticipates its next directional trend. The crossing of the 25-SMA (green line) below the 50-SMA (blue line) suggests that the bears have gained the upper hand in the shorter term, confirmed by the continuous formation of lower highs.
The Fibonacci midpoint at $182.80 offers support just above a demand zone, where the price has found support for a retracement on multiple occasions. If the price action once again pivots off this support to form another lower high, a descending triangle could emerge, opening the potential for a breakdown toward $178.78, the 61.8% Fibonacci golden ratio in the longer term.
However, if the price pivots off the demand zone and breaches resistance at $191.56, it could signal a bullish reversal. The resistance at the peak of the prior uptrend around $196.68 could then become a psychological level of resistance for the buyers to clear. However, movement above this resistance could trigger a more sustainable rally higher toward $199.67.
Summary
Despite a beat in its latest earnings report, Apple has failed to provide the optimism necessary to catapult its share price. Support at $182.80 could underpin the price toward forming a new lower high, which could signal a potential breakdown of a triangle formation toward $178.78.
Sources: Koyfin, Tradingview, Reuters
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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