Apple shares have been forming a short-term downtrend ever since it broke below a long-term consolidation pattern earlier this year. A descending trend line can be drawn to connect the recent highs of price action and the stock looks ready to test the resistance area once more.
Stochastic is on the move up, indicating that buyers are pushing prices up for the time being. RSI is also climbing, which means that there’s enough momentum to lead to a test of the falling trend line.
Meanwhile, the short-term 100 SMA seems to be making a move below the longer-term 200 SMA, suggesting potential downtrend continuation. Price could find resistance around the $126/share levels and then head back to the previous lows around $120/share later on.
Apple Shares Outlook
Apple shares got a strong boost from news that Societe Generale upgraded their rating on the stock from “hold” to “buy” before the release of its Q2 earnings figures. According to analysts, Apple sold an estimated 5 million Apple Watches and 48 million iPhones in the recent quarter and probably achieved stronger earnings.
TheStreet ratings team also rates Apple shares as a “buy” because of the company’s strengths in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity.
Renewed risk appetite in the financial markets is also adding fuel to the rally in Apple shares. Just recently, Greek government officials passed a revised reform proposal to secure more bailout funds that could allow the country to stay in the euro zone. This was seen as a better option for both Greece and the rest of the euro zone, which could restore stability in the financial markets.
Apple shares could draw further support from the release of its earnings figures on July 22, especially if the numbers beat most analysts’ expectations.
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