Apple Stock Price Forecast: Is it a Buy Ahead of Earnings?

Summary:
• Apple stock price has bounced back recently amid positive signs of a Fed pivot and a falling US dollar. What next for AAPL?

Apple stock price has bounced back recently amid positive signs of a Fed pivot and a falling US dollar. The shares have risen in the past five straight days and are trading at the highest level since September 27. It has risen by almost 13% from its lowest level this month. 

Apple earnings ahead

There are two main reasons why the APPL stock price has bounced back. First, there are signs that the Fed will start pivoting in the coming months. For one, America’s consumer confidence dropped sharply in October. Housing numbers have been under intense pressure as well. As a result, some Fed officials are advocating for a pivot, which could happen in its November meeting.

A Fed pivot is important for the Apple share price for several reasons. For example, it will push investors back to technology stocks that have plummeted this year. Also, it will help drag the US dollar lower. Indeed, the US dollar index has dropped by about $5 recently. 

A weaker US dollar tends to be bullish for Apple since most of its sales happen overseas. With the dollar rising by over 20% this year, it means that the prices of Apple’s products have risen by an equal amount this year. Indeed, Microsoft and Alphabet lamented about the strong US dollar as they published weak results.

Second, Apple stock price has risen as investors wait for the upcoming quarterly results. Analysts expect that Apple made over $88.77 billion in the third quarter and an EPS of $1.27. In the past three months, most analysts have downgraded their Apple EPS guidance. 

Apple stock price prediction

The daily chart shows that the Apple share price has made a spectacular rebound ahead of its quarterly earnings. Still, a closer look shows that the stock made a slanted triple-top pattern that is shown in black. In price action analysis, this pattern is usually a bearish sign. Its neckline is at $128. 

The stock has managed to retest the resistance at $150 while the Relative Strength Index (RSI) has continued rising. Therefore, the stock will likely continue rising now that it has moved above the 50-day EMA. If this happens, it will likely continue rising as bulls target the key resistance at $160. A drop below the support at $145 will invalidate the bullish view.