Apple Inc. (NASDAQ:AAPL) Facing the reality of market saturation

Apple Inc. (NASDAQ:AAPL) Facing the reality of market saturation

Apple Inc. (NASDAQ:AAPL) Facing the reality of market saturation

Apple shares fell Tuesday after HSBC downgraded the stock, citing too much dependence on a single product and slowing emerging markets economies.

HSBC downgraded Apple to hold from buy and cut its 12-month price target to $200 from $205. Apple shares fell 1.7 percent to $181.66 shortly after the opening bell Tuesday, adding to an 18 percent decline already for this quarter.

The note from the HSBC analysts said:

“Apple’s iconic hardware unit growth is broadly over for now. Revenues are only supported by higher selling prices and by the development of services. Flat unit growth has hit Apple’s share price and incidentally its key suppliers. What has made the success of Apple, a concentrated portfolio of highly desirable (and pricy) products is now facing the reality of market saturation.”

HSBC also went into an in-depth analysis of whether Apple should trade at a higher earnings multiple in line with stocks that sell luxury goods. It concluded that Apple’s shares are not “particularly expensive” but don’t deserve a higher multiple associated with luxury brands.

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 200.39.

The projected upper bound is: 190.82.

The projected lower bound is: 160.80.

The projected closing price is: 175.81.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

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 65.6105. 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 37.04. 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 -33. 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 buy 2 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed down -8.130 at 176.690. Volume was 14% above average (neutral) and Bollinger Bands were 79% wider than normal.

Open High Low Close Volume___
180.950 182.390 176.270 176.690 41,344,280

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 177.55 207.00 194.54
Volatility: 53 47 33
Volume: 41,846,568 38,697,240 31,760,918

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 is currently 9.2% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 38 periods.

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