Rosey's Outlook


by J.D. Rosendahl

Wednesday, April 20, 2011

AAPL: Big Earnings Continue

Yesterday, we had big earnings from IBM and INTC:  IBM and INTC Report Earnings Data, Stock Market Rallies!

Then came big earnings from AAPL:  Apple Profit Leaps, Easily Outpaces Forecasts



Apple reported a profit that blew past analysts' estimates, pushing its shares higher, as sales of its iPhones and Macs easily topped what analysts expected.

The maker of computers and personal electronics reported a net profit of $5.99 billion, or $6.40 a share, in its fiscal second quarter. That compared with $3.33 a share a year earlier on the same basis.

On the sales side, Apple garnered $24.67 billion in revenue, a full 83 percent higher than $13.499 billion from a year before.

Analysts who follow Apple expected the company to report a profit of $5.37 a share on sales of $22.383 billion, according to an estimate compiled by Thomson Reuters.

Apple's gross margins for the second quarter came in at 41.4 percent, compared with 41.7 percent a year earlier.

The company said it expects June quarter earnings of $5.03 a share on sales of $23 billion. The company has a reputation among investors for consistently low-balling its financial outlook.


AAPL:  Below is the daily chart on AAPL.  The stock looks to have made a wedge pattern, which is a classic wave 4 pattern.  If so, we should be clearly heading higher into wave 5.  Apple's earnings Wednesday after the close of the market has ignited AAPL in after hours trading, and shares are up $10 at $353.  The stock on Thursday morning should open strong and break above the top wedge line on big volume, which is initial confirmation of the wedge pattern.



Once again we have a key market component performing well and in bullish mode.  The wedge pattern target is $385 to $390. 

As large as IBM is as a component of the DOW, AAPL is an even larger component for the NASDAQ.  A bullish AAPL is bullish for the NASDAQ.

For the market to turn bearish, stocks like IBM, INTC and AAPL need to exhaust themselves moving higher and create topping patterns, which has not happened.  As long as fundamental earnings data is viewed as good by Wall Street and the market ignores external global and political events, the market should continue to push higher over time until these dynamics change.

Hope all is well.

J.D. Rosendahl, Rosey