We’re in the heart of earnings season here with some of the biggest tech names set to report this week. The biggest name set to report earnings this week — Apple — has a few factors working I believe justifies playing the stock on the upside. First we’ll hit the technicals and next we’ll look at the fundamentals. To start, let’s examine the decade-long weekly chart for AAPL . The purple dotted line is the 200-week moving average and it’s very obvious to see that it defended the bullish trend in 3 highlighted areas. In the latest volatility swoon (blue indicator below the chart), price attempted to break below the 200-week moving average but buyers defended and we closed above it on that week. The long-term bull trend is intact. Moving down to the daily chart, we see the price poking its head above the red parallel channel resistance level following the April tariff storm. This is bullish as we head into Thursday’s earnings. Just above us and possibly during earnings we’ll have the daily 50 and 200 day moving averages to contend with which will be part of the story as we construct a stock / option combo play for earnings. I hold Apple in both my dividend and growth portfolios at Inside Edge Capital, but I’m also looking to add the following trade in my shorter-term model Active Opps (Active Opportunities). I’m planning to buy the stock here, but also sell May 2nd $220 calls against it that are trading for $1.35. It’s tough to be outright bullish here so I’m looking to cap upside with a call sale, but reduce my average price with that call sale buffer. A quick calculation shows us that the $212 stock price divided by the $1.35 premium received is a monthly yield of 0.636%, which is annualized is 7.9% if you do this every month. I don’t do this every month, but I feel it’s appropriate in this market that ‘feels’ like it wants to probe higher, but not break out into a clear trend without some tariff clarity. The fundamentals Turning to the fundamentals I found that of the major companies reporting this week, Apple has the most international sales exposure. The US dollar has been in a massive decline since the first week of the year (approximately 6.3%, which is large for the FX market), which should boost earnings brought back to the US. Citigroup showed an earnings boost from FX tailwinds via a weaker USD, and conversely, Spotify, a Luxembourg-based company, reports earnings in euros and the stronger euro had a significant negative impact on SPOT’s earnings. Beyond the foreign exchange markets, we are looking for a pull ahead impact of sales as tariffs that were not in effect for Apple’s 2nd quarter, will be in effect in coming quarters. The iPhone 16 super cycle never really took effect as AI was introduced into the phone in a bit of a prolonged rollout period, but I have to think holdouts pulled the trigger on the 16. Finally, I think that any negative parts of the earnings report, specifically with challenges in China may be given a pass as Apple is proactively diversifying their supply chains from China to India and Brazil. I think Apple has a decent shot at challenging that cluster of daily moving averages following earnings after breaking daily chart support and holding the mega 200-week moving average. -Todd Gordon, Founder of Inside Edge Capital, LLC (DISCLOSURES: Gordon owns AAPL in his wealth management company Inside Edge Capital, LLC. Charts shown are Schwab’s ThinkorSwim) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
