Apple AAPL Stock Trend and Earnings Analysis

Companies / Apple May 31, 2023 - 10:36 PM GMT

Dear Reader

S&P 4133 - The stock market is clearly counting down to a major move after having gone nowhere for near 3 weeks, largely stuck in a range of mainly between 4150 and 4120. There is the Fed Meeting on 3rd May when the Fed is expected to raise rates by 0.25% that now carries 83% probability and then there is Apples earnings after the next days close (4th May), where Apple stock represents a ridiculous 7.2% of the S&P index so where Apple goes so does the rest of the market and thus is the focus of this analysis.

In terms of the trend forecast my expectations are for the market to put in a minor swing high before the End of April, in respect of which the last high was on 18th April at 4172, where I was eyeing a rally into 24th April to 28th April north of the last high of 4190. So either that's not going to materialise or Apple delivers a FOMO rally higher on release of earnings early May for a sling shot to over 4300.

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In terms of beyond the Swing high as I stated in my last analysis the S&P has swung through 4000 10 times to date which means it WILL swing through 4000 several more times during the remainder of this year, I would expect at least 4 more times thus something to keep in the back of ones mind that we are not done with 4000 yet, and thus no matter how high the S&P goes it is highly probable that it will revisit sub 4000 several more times this year.

A recap of my stock market big picture and links to the extensive analysis that is is built upon.

And for the S&P to ultimately target a trend to 4500+ by Mid Summer 2023.

Whilst my Swing projection as of the March low is for 4300+

In terms of deviations against the trend forecasts the Dow should now be trading at 32,900 vs actual 33,808 for a +2.7% deviation against trend forecast. Whilst the S&P at 4130 vs 4133 actual for a +0.0073% deviation against forecast which even i think is a bit spooky some 7 months into trend forecasts, which WITHOUT the benefit of hindsight continue to forecast year ends of Dow 34,500 and S&P 4350.

May US Fed Rate Hike

Nine days to go and the probability of a Fed 0.25% rate hike rises to 85.4% vs 78% of 2 weeks ago at their 3rd May Meeting, a month ago the probability was just 17%!

Recession vs Inflation...... Crude oil retreated from the top of it's range ($83 to $64) now perched at $77.

Apple Stock Price S&P Earnings Analysis

Apple reports earnings after market close on 4th of May, EGFS are +12% and 8*% which suggest to expect an earnings beat so should propel the stock price higher. In terms of the stock chart Apple has been in a bull market since it bottomed some 3 months AFTER most of the tech titans early January. Up 33% in 4 months! The stock price IS over extended and trading on 28.6 X earnings is EXPENSIVE! The herd is definitely buying for the sake of just following what other fund herd managers are doing. The stock price is only 8% from a new all time high. It could blast through to new all time highs but I can't imagine it doing so as that would put it at over 30X earnings! In terms of future price action I see Apple trading to sub $145, I can't see it going to new highs, so $168 could be the top. but so could have $166 before that and $162.5 before that, which is why I am only 6% invested because I buy when cheap and distribute when expensive and to me Apple IS expensive hence I continue to sell into the Apple rally.

Apple Earnings Analysis

As goes the Apple stock price so goes the S&P.

Table big Image - https://www.marketoracle.co.uk/images/2023/Apr/Apple-Earnings-Stock-Market-Trend.jpg

Analysis

1. Apple stock price tends to be rising into earnings, 77% probability.

2 If in an uptrend and not extremely overbought then S&P can continue higher for another 140-180 points the following the next days close, rallying for 15 or more trading days.

3 Apple beats expected earnings far more often then misses, about 90% chance of an earnings beat.

4 Stock market is usually in an uptrend going into Apple earnings where even if it corrects afterwards tends to be short lived before trending higher.

5. If S&P is in a down trend going into earnings then then S&P will continue lower, usually by 1% to 2% before bottoming i.e. corrective price action.

6. The only contrary extreme move was April 2022 during a strong bear market where S&P continued the bear trend lower.

7 Even when very overbought the market can continue higher for some points, though number of days is random, could be just 1 as Feb 2023 high.

Conclusion

if S&P is is rallying into Apple earnings then could mark a top for a minor correction shortly after earnings.

If S&P is falling into Apple earnings i.e. if April 18th 4172 turned out to be the swing top and the S&P is trading at say below 4100 then expect the S&P to bottom shortly after Apple earnings at say 2% below the following days S&P close.

So overall Apple earnings tend to be BULLISh for the S&P i.e. a continuation of the bull market that may be punctuated by a minor correction or soon mark an end to a correction already underway where there was only one instance that went against this pattern, April 2022 when the S&P fell another 302 points!

I will be watching to see where the S&P is going into Apple earnings day to have a clearer picture of how the S&P will react afterwards.

In terms of my trend expectations they remain the unchanged in that I expect the S&P to trend higher to 4300+ that now looks set to transpire some days AFTER Apple earnings so well into May and thus I interpret most recent price action off of 4172 as being corrective.

AI Tech Stocks Portfolio - Big Tech Earnings Week

It's mega-tech earnings week starting Tuesday.

Big Image Link - https://www.marketoracle.co.uk/images/2023/Apr/AI-tech-stoclks-17.jpg

Portfolio Google spreadsheet https://docs.google.com/spreadsheets/d/1-dPfmAcnptFJxJZq3h9caMLzkO0ceSA8VsO4TmU7dQo/edit?usp=sharing

Tesla continues to eye a trend to $144 where we will only know how deep the decline will actually go with the benefit of hindsight, until then $144 remains the most probable achievable target. with decreasing probability all the way down to $117, at which I have parked my lowest buy limit order,

GOOG - Reports 25th April - $106.2 - -7%, 390%, PE 23.3 - Earnings are likely to be weak, though the stock continues to attempt to break above $109 to target $120, it's not clear if it will be able to do so based solely on AI Mania FOMO.

MSFT - 25th April - $285.6 - EGF 0%, 9%, PE 31.1 - Earnings should be ok, but the stock now IS expensive with a lot of CHAT GPT FOMO built in where a break above $295 would target $310 a rally I would continue trimming into because when the AI FOMO ends this stock could easily trade back down to under $250.

META - 26th April - $212.9 - EGF 1%, 17%, PE 21.7 - META should post good earnings, eyeing filling it's huge gap between $244 and $290 but the stock is up 140% off it's bear market low so I don't see it being able to do so without a correction, more likely is a positive reaction to earnings tops out at just short of $240.

AMAZON - 27th April - $107 - EGF 17%, 145%, PE 148.6 - High EGF's wholly offset by the crazy PE. Stock price in a weak uptrend being lifted higher by the general market, unless there is a earnings surprise I suspect Amazon will soon once more start gravitating to trade under $90.

INTEL - 27th April - $30.3 - EGF -106%. - 37%. PE 16.4 - Horrific EGF's coupled with high PE's mean not to expect any sort of blast off in Intel's stock price. However the trend is looking good so the stock could rally on bad earnings to target a break above the last high of $33.7.

So it's a case of weak earnings for most vs AI FOMO, of the above META looks the strongest, Amazon the weakest.

France / Europe is Dying

FRANCE is DYING, and so soon will the rest of Europe! Europe's Pensions and Healthcare system is unaffordable as the Ageing DEMOGRAPHICS time bomb is EXPLODING! Not enough workers to cover retirees and as France illustrates the population does not want to give an inch in response to government attempts to reign in pensions liabilities.

The irony is the only thing that can save France / Europe is mass migration plus robot slave workers. Germany read the writing on the wall and let in 1 million syrians all whilst Macron dances around the issue.

Tesla and other similar driod makers should do well.

Meanwhile Japanese Yale Uni professor Yusuke Narita who hates his parents and is eager to kill them off so he can inherit their junk calls on the elderly to commit mass suicide, maybe they should start with useless Yale professors? Real Logan's Run coming soon!

Amazon has the solution! Mail order babies!

And lastly

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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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