Apple Q2 2020 earnings lookahead and what to watch after the report

An “all clear” for Apple.

That’s what Todd Gordon, managing director at Ascent Wealth Partners, will be watching for in the charts as the iPhone maker prepares to report earnings after Thursday’s closing bell.

Shares of Apple climbed nearly 1.5% in Thursday’s trading session to near $292 and are down less than 1% year to date. Wall Street analysts largely remained bullish on the stock heading into the release.

“We still like the stock. We hold it in all three of our portfolios at Ascent. I think the value proposition for the company is very much intact,” Gordon said ahead of the report Thursday on CNBC’s “Trading Nation,” citing Apple’s strong customer loyalty, broad-based product ecosystem and growth in its services division.

Moreover, “on the chart, this pullback has really been quite garden variety,” he said.

“It’s only been a 35% pullback, which is the second worst in four major pullbacks since 2012, and this is assuming the low is in,” Gordon said. “So, heading into the report tonight, if the report is strong, if it’s received well, the challenge on the daily chart is to get up around that $310 region. That would be the all-clear.”

Beyond that, Apple’s stock is doing something it hasn’t done in about a year, and it could bode well if history repeats itself, the chart analyst said.

“Heading into the earnings tonight, to get a little technical here, the realized volatility right now is higher than the implied volatility. That hasn’t happened over the last four earnings reports,” Gordon said. “The last time that happened was January 2019 after the end of that major 2018-19 sell-off. … That set up a major move higher in the stock.”

Back then, Apple ended up leading the market out of that collapse, he said.

“Not saying that’s going to be the case here, but something interesting to note,” Gordon said.

Disclosure: Ascent Wealth Partners owns shares of Apple.


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