As mentioned in a previous post, Apple was expected to release their earnings report earlier this week; and they did just that. In the first quarter, Apple absolutely blew away expectations, and their stock shows it. Today, we'll go over the Apple earnings report, how the stock market reacted, what we can expect moving forward, and how you can profit from the trends.
What We Saw From Apple's Earnings Report
As mentioned above, Apple absolutely blew away expectations with the release of their earnings report. Here's the overview of what we saw…
- Earnings Per Share – While analysts expected apple to post earnings per share of around $2.16, the company actually produced an EPS of $2.33.
- Top Line Revenue – When it comes to top line revenue, the company produced $56.08 billion in total revenue. This is massive growth from the $45.6 billion the company saw at the same time last year.
- Available Cash – Apple also reported that it has increased its available cash on hand to a massive $193.5 billion!
All in all, as you can see from the data above, Apple's report was absolutely incredible.
How The Stock Reacted
Upon the release of the positive earnings Monday, Apple's stock price skyrocketed to new highs. $134.50 by early morning trading on Tuesday. However, since then, we've seen quite a bit of downtrends from the company. At this point, the stock has fallen all the way back to the support level that we saw before the release of the positive earnings report.
What We Can Expect To See Moving Forward
Moving forward, especially in the short term, I'm expecting to see great things from Apple. There's one key fact that binary options have to keep in mind. It's the fact that movements in the market are a series of overreactions. Upon the release of the report, investors got excited and overreacted. As a result, Apple's stock saw an unreasonable rate of growth. As the stock started to see resistance, investors drove the price down at an incredible rate; once again as the result of overreactions. That leads us to what we're seeing now. Currently, we're seeing a symmetric triangle in the stock chart at a point where the price is meeting support. In most cases, this will lead to a breakout in the positive direction.
How To Take Advantage Of the Trend
It's unlikely that Apple's going to break through current support levels; and since the stock is hugging the line, it's presenting a great opportunity to make money from call options. In this case, I would wait until we start seeing movement. Any movement downward would be an immediate breakout and most likely lead to a decent downtrend. Upward movement will probably lead to a breakout through the resistance line. When you start to see the movement, make your trades based on the direction of the trend and you should be in the money! Happy trading my friends!