Apple Stock Looking Attractive at Current Levels
The long-term momentum in Apple (NASDAQ:AAPL) continues to show positive strength and the latest short-term pullbacks in market prices offer some compelling opportunities for CFD investors. Some of these declines have been based on weaker than expected retail sales numbers into the final months of 2014. But changes in marketing strategy and new additions in the upcoming product line have brightened the outlook and the traditional tendency to start adding exposure in AAPL prior to earnings look as though it could pay off handsomely as we approach the mid-point of 2015.
“Apple’s next earnings release is scheduled for April 22, with a majority of the market’s analysts expecting quarterly revenues to come in near the $52-55 billion range,”said Michael Carney, markets analyst at Teach Me Trading. “If the final results match these estimates, CFDs in APPL should see some significant upside as this would equate to yearly earnings growth of 27% and yearly sales growth of 21%.” And when we look at the balance of the evidence, it starts to become clear that even these optimistic numbers could actually be too conservative. Over the last three months Apple has revised its earnings estimates higher by 6%, and this is something that could be seen again when the next earnings report is finally made public on April 22.
For all of these reasons, it looks like an excellent time for CFD traders to start establishing new long positions in APPL. Of course, the best way to settle on exact price levels for establishing those positions is to use technical analysis to determine strong support and resistance levels. In the chart below, we identify some of those important areas.
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Apple, Inc. (NASDAQ: AAPL)
Critical Resistance:135
Critical Support: 122
Trading Bias: Bullish
(Chart Source: CornerTrader)
Apple, Inc. / AAPL CFD Trading Strategy: Indicator readings suggest positive momentum is still in place. Good trade entries exist as long as support in the lower 120s holds intact.
CFD prices in AAPL have shown a corrective short-term pullback after hitting the highs for the year above 136. But these moves have not been strong enough to erode the bullish momentum that has been in place for most of the previous year. This ultimately means that CFD traders have new opportunities in APPL at current levels. Strong short-term support rests in the lower 120s as these levels can be used for establishing new long positions. Risk to reward ratios are still favorable here, as prices can easily rise back toward the upper 138s if we start to see additional optimism before and after the earnings report is made public.
So from both a technical and fundamental perspective, there are strong reasons for CFD traders to consider establishing new positions in AAPL. There are potential risks in the trade here, and this would be encountered if the earnings report disappoints the initial expectations. But when we look at Apple’s earnings releases from an historical perspective, we can see that Apple has a solid history of offering lower initial forecasts that are firmly beaten once the actual report is released to the market. This could send CFD prices in AAPL much higher into the second half of this year.
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