Apple Inc. (NASDAQ:AAPL) need for aggressive iPhone price cuts

Apple Inc. (NASDAQ:AAPL) need for aggressive iPhone price cuts

Apple Inc. (NASDAQ:AAPL) need for aggressive iPhone price cuts

Shares of Apple Inc. AAPL, -1.50% dropped 1.9% in morning trade Monday, enough to pace the Dow Jones Industrial Average’s DJIA, -0.36% decliners. Wedbush Morgan analyst Dan Ives reiterated his outperform rating and $200 stock price target, which is about 34% above current levels, but said Apple has to “aggressively” cut prices in China on its iPhone XR to boost lagging sales and that a “significant” video content acquisition is needed soon.

He said the XR price cuts are needed to pull forward roughly 15 million to 20 million iPhones that would otherwise sit idle, waiting for the next release, or worst case, move to lower-priced competition. And while Apple is counting on its services business for future growth, it is currently “playing behind the eight ball in this content arms race” with competitors including Netflix Inc. NFLX, -1.38% Walt Disney Co. DIS, -0.20%and AT&T Inc. T, -0.81% “While acquisitions have not been in Apple’s core DNA, the clock has struck midnight for Cupertino in our opinion and building content organically is a slow and arduous path, which highlights the clear need for Apple to do larger, strategic M&A around content over the coming year to ‘double down’ and drive the services flywheel,” Ives wrote in a note to clients.

Apple’s stock has tumbled 32.7% over the past three months, while the Dow Jones industrial Average DJIA, -0.36% has slipped 5.8%.

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 164.35.

The projected lower bound is: 133.12.

The projected closing price is: 148.73.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black 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 9 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 70.4375. 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 38.46. 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 6 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 -30. This is not a topping or bottoming area. The last signal was a buy 5 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 10 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed down -2.290 at 150.000. Volume was 22% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open High Low Close Volume___
150.850 151.270 149.220 150.000 32,439,186

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

Moving Averages: 10-period 50-period 200-period
Close: 151.42 174.25 192.36
Volatility: 71 57 38
Volume: 45,810,772 46,434,044 33,497,926

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 22.0% 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 64 periods.

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