Apple (AAPL) Stock Ahead of Earnings: Buy, Sell or Hold?

The most awaited results this earnings season are undoubtedly from Apple Inc (AAPL). Apple stock is down about 10% from its peak price where it traded earlier this month. It’s a clear sign that investors aren’t upbeat this time around. Official estimates at $9.95 don’t look attractive considering the wild run-up we have seen in the stock this year. Apple has outperformed the NASDAQ by a huge margin. Take a look at Apple vs NASDAQ Past Six Months chart below.

We can expect the sales momentum to continue as far as iPad and iPhone 4S are concerned, but Mac sales could come out to be a dampener on the overall revenue. Apple is losing its innovative edge, and we have talked about it in one of the posts earlier this month. For now, it seems that Apple has lost interest in doing something new with the Mac. Mac sales should be watched closely as they could be signaling a tipping point in the segment on the whole.

At this point no one surely knows where the Apple stock is headed next, but a disappointing set of numbers could intensify the selloff that started a few days back. All we know is that its selling-off on higher volumes and that should not be taken lightly.

Some analysts are betting on $550 for the Apple stock to provide considerable support, and this could be a make or break level on the result day.

Bulls should not lose hope as Apple doesn’t have a history of disappointing investors, but its worth staying on the sidelines before we have the actual numbers to play with.

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