Apple Inc. (NASDAQ:AAPL) earnings will provide some early insight into how Apple’s new iPhones are selling

Apple Inc. (NASDAQ:AAPL) earnings will provide some early insight into how Apple’s new iPhones are selling

Apple Inc. (NASDAQ:AAPL) earnings will provide some early insight into how Apple’s new iPhones are selling

Apple’s earnings on Wednesday will provide some early insight into how the company’s new iPhones are selling as investors watch the forecast for its all-important holiday season.

Apple released three iPhone 11 models on Sept. 20. Apple’s fiscal fourth quarter ended on Sept. 30, so Wednesday’s earnings report will include ten days of iPhone 11 sales.

But Apple’s forecast will also provide some clues as to whether this year’s new iPhones, which feature longer battery life and an improved triple-camera system, are hot sellers. Last year’s iPhones got off to a rocky start when Apple said on Jan. 2 that it had missed its own December quarter estimates by billions of dollars, thanks to weakness in iPhone sales in China.

While Apple is expanding its focus to online services, subscriptions to TV shows and video games, and wearable computers like the Apple Watch, the iPhone remains one of the key ways for investors and analysts to evaluate the health of the world’s most valuable publicly traded company. In the year ending on June 30, 54% of Apple’s $249 billion in revenue was directly attributable to iPhone sales.

“We underscore that (like last year) near-term investor sentiment is likely to be shaped by iPhone revenues,” Sacconaghi wrote.

The iPhone is required for many of Apple’s growth businesses: people with iPhones are more likely to sign up for iCloud, or Apple TV+, and you need an iPhone or else the Apple Watch won’t work.

Apple’s iPhone strategy hasn’t changed since last year: It released three phones, two higher-end models that start at $999 or more, called the iPhone 11 Pro and iPhone 11 Pro Max, and a lower-priced phone that’s meant to be the mainstream model, called the iPhone 11.

This year, Apple reduced the starting price of the iPhone 11 by $50, which some analysts say is boosting demand.

“Monthly iPhone trends in China are encouraging with data showing growth in two of the last 3Qs and comps also get much easier toward year-end,” UBS analyst Timothy Arcuri wrote, suggesting that showing growth could be easier for Apple given last year’s guidance miss, and predicting that iPhone unit sales would grow 1% year-over-year to 188 million units.

“Investor sentiment on iPhone units has reversed in the recent weeks following the successful launch of iPhone 11 models with a general bias to the upside in 2020,” Arcuri continued.

Morgan Stanley’s Katy Huberty wrote that some data points were leading her team of analysts to believe that “iPhone replacement cycles are in the process of stabilizing in some markets following the introduction of the iPhone 11 models.”

“Our analysis of store foot traffic data in the U.S. and web traffic globally indicates that customer interest for iPhone 11 is tracking better than the XS last year,” Jefferies analyst Kyle McNealy wrote.

Ultimately, many analysts remain bullish on Apple because of the chance it could spur a big upgrade cycle with a 5G iPhone in 2020. Apple is unlikely to confirm that timeline or discuss any future products during Wednesday’s earnings.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 224.68.

The projected upper bound is: 253.46.

The projected lower bound is: 234.44.

The projected closing price is: 243.95.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 75.2976. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 65.57. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 91. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 16 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed down -5.760 at 243.290. Volume was 35% above average (neutral) and Bollinger Bands were 71% wider than normal.

Open     High      Low     Close     Volume___
248.970 249.750 242.570 243.290 35,709,868
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 241.22 223.03 197.87
Volatility: 21 28 30
Volume: 22,205,944 26,637,308 27,754,610

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

APPLE INC is currently 23.0% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AAPL.O (mildly bullish). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 49 periods.

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