Apple reports their earnings after the market closes on Tuesday. Current share price is at $419. Let's take a quick look into their performance during the last year. EPS in last four quarters have been growing steadily:Q3/11: 7,79 (consensus 5,84)
Consensus estimate for current earnings is $7,21 a share which is a 55% improvement compared with EPS a year ago. With this consensus estimate Apple has a one quarter forward looking P/E of 15 and a trailing P/E of 16. Apple themselves estimate a $25 billion revenue for previous quarter with $5.50 EPS but don't be misled by that. They have done that for the past year and it's dangerous to take this guidance seriously (if you're planning to short).
I am fairly positive that Apple is going to deliver results that are above estimates. iPhone and iPad sales have not slowed down (see graph below).
iPhone is the product with the biggest profit margin as well as far as can be understood from their previous Q-10 filing. During the previous quarter Apple launched their new OS - Lion as well as some improvements on Macs. Looking at the news flow in the previous quarter I'm fairly certain that we will see Apple topping the estimates. By how much and how the markets will react this is the question.
From a technical point of view I would be surprised if Apple didn't reach a new high in at least somewhere around the 430 area before the earnings.
All in all I will probably take a position and hold at least until the earnings.