Apple Inc. (AAPL): How A Miss Today Could Trigger A Rally Tomorrow

History doesn’t always repeat itself
Bulls will gladly point to last year’s fiscal second quarter. Analysts were betting on net income clocking in at $10.04 a share, suspiciously close to where the consensus estimate is at $10.07 a share a year later. Apple Inc. (NASDAQ:AAPL) cranked out a profit of $12.30 a share. Wall Street was blown away, and the stock rallied 9% the next day.

However, there were several times before that when Apple did beat expectations but the stock still sold off. A big reason for the divergence is that the stock had rallied heading into the quarterly report. Success was discounted, and here’s where Apple selling at its lowest levels since 2011 could pay off for those that are long Apple shares.

An Apple miss may still be interpreted as a positive by the market. If the guidance isn’t dreary or if Apple hints at upcoming product rollouts or beefs up its initiatives to return money to its stakeholders, a bottom-line miss won’t be the end of the world.

It may be actually be the start of a rally that is long overdue for a company whose share price has crumbled at a headier pace than its contracting fundamentals.

Yes, Apple Inc. (NASDAQ:AAPL)’s stock can bounce higher after a bad report — just as it dropped after strong reports when the sentiment was overbearingly bullish.

The article Apple’s Miss on Tuesday Could Trigger a Rally on Wednesday originally appeared on Fool.com and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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