Apple shares slipped 0.8% ahead of earnings as traders eye China demand and services growth. Options volume suggests caution before the 4:30 p.m. report.
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Apple shares slipped 0.8% in early trading Tuesday, giving back some of last week's gains as traders positioned ahead of the company's quarterly report due after the close. The stock has traded in a narrow range for the past two weeks, with the $175 level acting as resistance since late March.
Volume was 20% below the 20-day average through mid-morning, a pattern several traders said suggested caution rather than conviction. "No one wants to take a big directional bet into the print," one New York-based options trader said. "The China story is the open question."
Apple's revenue from Greater China fell 13% in the December quarter, and analysts expect another decline when the company reports. The iPhone maker faces intensifying competition from Huawei and other domestic brands. A weaker-than-expected number could push the stock back toward the $165 support zone, a level it tested in February.
On the upside, services revenue has been a bright spot. The segment grew 11% in the prior quarter, and margins there are roughly double the hardware margins. "The services story is still intact, but it's not enough to offset a hardware miss," the trader said.
The report is scheduled for 4:30 p.m. Eastern. Apple has not pre-announced any results.
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