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Apple turns higher, remains bullish and eyes next resistance

The overall trend remains bullish for the most valuable tech company as investors continue to ignore negative news.

The Apple stock traded somewhat higher on Tuesday, erasing Monday’s losses as investors quickly forgot about yesterday’s negative report.

Troubles in the PC sector

According to a new report, global shipments of personal computers fell by nearly one-third compared to the previous year, with Apple’s products experiencing the steepest decline.

According to a preliminary report by International Data Corporation (IDC), traditional PC shipments decreased by 29% in the first quarter of 2023 compared to the same period in 2022, falling to 56.9 million units. In its analysis, IDC categorizes desktops, laptops, and workstations as traditional PCs, excluding tablets, in this report.

The number of Apple products distributed decreased by 40.5%, from 6.9 million in the first quarter of 2022 to 4.1 million in the most recent quarter. Based on IDC’s report, Apple’s market share in the personal computer sector decreased from 8.6% to 7.2%.

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The good news is that manufacturers now have the time and space to make adjustments as many factories evaluate manufacturing alternatives outside of China, according to IDC’s report. In addition, as escalating tensions between Washington and Beijing threatened to disrupt Apple’s carefully managed supply chain, the company is progressively diversifying the location of its manufacturing base.

Earnings report coming soon

As Apple nears its next earnings report date, Wall Street will be searching for positive developments. This will be scheduled for May 4, 2023. Analysts believe Apple will post earnings of $1.44 per share in this report. This would represent a 5.26 % decrease year-over-year. Meanwhile, the most recent consensus estimate predicts revenue of $93.39 billion, down 4% from the same period last year.

Furthermore, analysts project full-year earnings of $6.05 per share and revenue of $390.02 billion, representing decreases of 0.98% and 1.09%, respectively, compared to the prior year.

Apple’s current valuation metrics, including its Forward P/E ratio of 27.24, should also be considered by investors. Apple’s industry has an average forward price-to-earnings ratio of 8.97, so one could conclude that Apple is trading at a considerable premium.

New stores in India

Tim Cook, the chief executive officer of Apple Inc., will travel to India next week to open the company’s first stores there, highlighting the company’s ambitions for the country as a growth market and manufacturing base.

According to sources who requested anonymity to discuss private plans, Cook will likely oversee the formal opening of the two locations in India’s financial and political capital. Apple announced Tuesday that a store will open in Mumbai on April 18 and New Delhi on April 20.

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India’s strict rules prohibit global brands from establishing own-brand stores unless they procure a substantial component of their merchandise from the country.

As long as the stock price trades above previous highs near $156, the outlook seems bullish, likely targeting another significant resistance in the $176 area.

Apple daily chart

Apple daily chart, source: author´s analysis, tradingview.com

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