Apple Inc. (NASDAQ:AAPL) among the first companies to say coronavirus is affecting its business

Apple Inc. (NASDAQ:AAPL) among the first companies to say coronavirus is affecting its business

Apple Inc. (NASDAQ:AAPL) among the first companies to say coronavirus is affecting its business

If you are a tech company, there is no side-stepping the impact of the coronavirus on every part of your business. A lot of this comes from the fact that the biggest tech companies in the world all are so heavily dependent on China for its manufacturing and supplies. Apple is no different.

In fact, Apple was among the first companies to say coronavirus is affecting its business with both manufacturing and supply chains affected in China. It even shut all Apple stores across the country — it has shut stores in Italy too. Mid-February, the company told investors the epidemic is going to have an impact on its revenue in the quarter with iPhone supplies being impacted along with actual sales in China.

So far, the impact has not trickled down to India. However, if the situation prolongs there is a possibility that some models of the iPhone could go out of stock. To Apple’s advantage is the fact that the iPhone XR and iPhone 7, the more popular models in India, are now manufactured locally. However, even those could be impacted if component supplies dry up. For now it seems China is recovering, but slowly.

The coronavirus impact could also end delaying product launches this year. From the so-called more affordable iPhone SE2 to Macs and MacBooks, a lot of products could be delayed this year. It helps Apple’s cause that is does not really give a date to launches, other than the September event.

However, there are already calls to call off the annual World Wide Developer Conference in San Jose. This could really throw a spanner in the works, as WWDC in June is where Apple tells its developers what to expect and how to prepare for coming products and iOS updates. You could be looking at the entire ecosystem being affected by COVID-19.

With most of the tech industry under the weather thanks to coronavirus, there will be increasing clamour from all quarters to reduce everyone’s dependence on China for manufacturing. Apple has already been under pressure over this for a few years now. While it has moved some production back to the US and countries like India and Brazil, there will now be more calls to ramp up on Plan B as China is not really going as per plan for Cupertino.

While there is an immediate impact of the coronavirus on brands across countries, it now seems the virus is going to leave a lasting impact on the tech industry as a whole.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 311.42.

The projected lower bound is: 266.84.

The projected closing price is: 289.13.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 77.5300. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 43.36. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 4 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -60. This is not a topping or bottoming area. The last signal was a buy 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 30 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed down -3.890 at 289.030. Volume was 70% above average (neutral) and Bollinger Bands were 111% wider than normal.

Open     High      Low     Close     Volume___
282.000 290.820 281.230 289.030 56,544,248
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 289.86 307.73 244.50
Volatility: 85 48 34
Volume: 67,321,848 38,940,804 29,494,580

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

APPLE INC gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
APPLE INC is currently 18.2% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of AAPL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AAPL.O and have had this outlook for the last 11 periods.

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