Full Apple Earnings Preview (AAPL)

Apple Inc. (NASDAQ: AAPL) is set to report earnings today after the close.  The stock just got a huge break today after Intel Corporation (NASDAQ: INTC) managed to blow out earnings numbers and give guidance that was still somehow above targets.  Apple’s shares had been sliding until literally this week and its chart was getting to the point that many were expecting a weak earnings forecast that was worse than the company’s usual “under-promise” guidance.

It was just Monday that Apple shares literally hit $320.16, making that old $292.00 target point and figure chart analysis looking more and more feasible.  After a 2% gain so far this morning we have Apple shares up above $344.00.  That is a high since April 4, indicating that Apple has just wiped out much of that negative near-term chart overhang that traders have been hanging on. 

Thomson Reuters has estimates of $5.36 EPS and $23.34 billion in revenues.  The big concern is what Apple is willing to offer for guidance.  Thomson Reuters has current expectations at $5.25 EPS and $23.82 billion in revenues.  For its September-end 2011 fiscal targets, Thomson Reuters has estimates of $23.03 EPS and $100.75 billion in revenues.

We are not going to spend much time on the stock chart now as the last two days have offered a keen reversal.  The stockcharts.com chart here does show one crucial read though: Apple’s stock is right now fighting at its 50-day moving average of $345.75.  The 200-day moving average was expected to offer at least some key support when the stock was falling.  That 200-day moving average now is $308.54.

Options traders seem to be expecting a move of up to $12.00 or $13.00 in either direction today after earnings, but that is using the MONTHLY CALLS & PUTS that expire in May rather than looking at weeklies. 

Analysts still have a price target north of $425.00 on the stock.  The weakness has been present ever since JMP Securities issued the only true analyst downgrade in longer than memory serves. 

Lastly, this could be a game-changer of an earnings report for Apple.  The stock has been stuck since its last earnings report.  There are many bulls remaining who will be looking for that “I TOLD YA SO” moment, but the bears had been in charge up until the last two days.

JON C. OGG