Apple Inc. (NASDAQ:AAPL) reports earnings in the next couple of weeks on January 31st, a Tuesday so no one wants to have a position going into earnings. Thus, the unwinding on Friday makes perfect sense from a risk management perspective. Given the binary nature of the event, it is best to wait until after earnings to consider buying Apple stock.
Additionally, the market profile shows that the $120 area in a long term monthly chart is within one standard deviation of accepted price. Typically prices tend to have acceptance within 1 standard deviation. I went out 5 years to have a view of the bigger picture. The longer the outlook period, the more accurate the distribution areas, which represents the long-term market players. Only a major catalyst will cause the market participants to find a new value area. The catalyst will be the typical growth and radical/architectural innovation opportunities that Apple currently lacks.
With such a strong visual representation of the time and price opportunities clearly identified, it is in your best interest to be patient in entering Apple Inc. (NASDAQ:AAPL) stock. Even extremely long-term traders/investors need to focus on entry. Don’t make a costly mistake entering early because of fundamentals alone. You need to take into account the market participants’ behavior.
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