For the past few days we’ve speculated over the indices strength and weakness. Saturday we penned our thoughts on “The Generals” influence on our decision process. In summary, unless these stocks rollover, we find it hard to rationalize a sudden drawdown of any significance.
Apple is one of those generals. The news could not come at a worse time for Samsung, however it did benefit Apple, as the stock begins building the right side of a cup pattern. AAPL is trading 117.85 pre-market, so 120.00 might come sooner than anticipated. RSI is nearing the 70 level, though it could embed if fund managers keep buying the shares. SOTEMA is decidedly bullish.
“Apple Inc. is expected* to report earnings on 10/25/2016 after market close. The report will be for the fiscal Quarter ending Sep 2016. According to Zacks Investment Research, based on 13 analysts’ forecasts, the consensus EPS forecast for the quarter is $1.64.” – Source Nasdaq
This morning Samsung announced it will jettison the Galaxy Note 7. Ouch! At some point the Samsung PR machine will weather this storm. Until that time, we view this as a catalyst to build a position in Apple shares.
The weekly chart reflects the cup completing the “rim” somewhere North of 128.00 ~ 130.00 per share. These are lofty targets, but well within range over the fall months.
Finally, if you are considering buying AAPL shares, I would look for the next pullback from highs similar to the September dip. With earnings 14 days away, its getting more risky to buy, unless you’re thinking of an earnings run. I would entertain stops if the shares pulled back into the recent pattern, somewhere around 114.00 (+/-).
What Apple ultimately does over the coming weeks is up to institutions. If fund managers keep buying the stock, we will see higher volume.
Finally, to reiterate, in order for the markets to pullback, we need to see “The Generals” falter.
Here is a link to a short video from last nights LIVE broadcast. I covered a few more stocks therein.
Happy Trading – Vinny
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