Yahoo Finance

Key Takeaways

• Apple shares rose Friday morning after the company reported better-than-expected earnings and said customers are increasingly upgrading their iPhones to take advantage of AI features.

• The stock looks set to continue its upward momentum after finding support near the lower trendline of a rising wedge pattern.

• Investors should watch crucial overhead areas on Apple's chart around $260 and $350, while also monitoring major support levels near $235 and $218.
  

Apple (AAPL) shares rose Friday morning after the company reported better-than-expected earnings and said customers are increasingly upgrading their iPhones to take advantage of AI features.

While the company reported a drop in iPhone sales during the December quarter due to regulatory hurdles in China and a slow rollout of its flagship Apple Intelligence features in other markets, profit topped expectations in the first first quarter as services revenue surged.

CEO Tim Cook said late Thursday in the company's earnings call that more customers upgraded their iPhones last quarter than in any previous period, and that he expects Apple Intelligence to "go mainstream" as the base of iPhone 15 and iPhone 16 users grows. In April, Apple Intelligence will be made available in additional languages, including French, German, Italian, Portuguese, Spanish, Japanese, Korean, simplified Chinese, and localized English in Singapore and India.

Apple shares were up nearly 1% to around $240 in recent trading. The stock has gained 30% over the past 12 months, slightly outpacing the S&P 500 over that period.

Below, we break down the technicals on Apple’s weekly chart and identify crucial post-earnings price levels that investors may be monitoring.

Rising Wedge Pattern in Focus

Apple shares have trended higher within an 18-month rising wedge, with the stock’s price recently finding buying interest near the pattern’s lower trendline ahead of the company’s quarterly report.

This move coincided with the relative strength index (RSI) reclaiming the 50 threshold earlier this month, indicating a positive shift in price momentum.

Let’s take a closer look at Apple’s chart to identify crucial overhead areas to watch and also point out two major support levels that could come into play during pullbacks.

Crucial Overhead Areas to Watch

Amid earnings-driven buying, investors should initially keep an eye on the $260 area. The shares face a confluence of resistance in this region near the stock’s all-time high (ATH) and rising wedge pattern’s upper trendline.

To forecast where Apple shares may be headed upon a breakout above the ATH, we can apply bars pattern analysis. This technique works by taking the price bars comprising the stock’s trend higher from April to December and repositioning them from this week’s low. The study indicates a potential high of $350 before a consolidation phase if price action rhymes.