Apple Inc. (NASDAQ:AAPL) plan to ‘aggressively’ ramp up AirPods production at risk due to coronavirus outbreak

Apple Inc. (NASDAQ:AAPL) plan to ‘aggressively’ ramp up AirPods production at risk due to coronavirus outbreak

Apple Inc. (NASDAQ:AAPL) plan to ‘aggressively’ ramp up AirPods production at risk due to coronavirus outbreak

Apple’s plan to ramp up AirPods production could be delayed due to the coronavirus outbreak.

The coronavirus outbreak has forced suppliers in China to halt production, but even if work resumes on Monday as planned, sources told Nikkei that there will be a shortage of components. The three AirPods assemblers are scheduled to resume work on Monday, but “production utilization rates may reach just 50% at best in the first week given the current conditions,” the report says.

Currently, Apple’s assembly partners are said to have “two weeks’ worth of materials and components needed for AirPods assembly.” They’ll have to wait for component makers across China to restart operations in order to receive new supplies.

“One of the big concerns is whether other parts suppliers in China can smoothly resume work to produce enough parts for final assembly,” the person said. “We really have to wait and see how things play out next week. If the assemblers could not get enough supply of parts in two weeks, it will be a big problem.”

Apple had reportedly ordered its suppliers to produce 45 million AirPods units during the first half of 2020 in order to keep up with “surging demand for the new wireless earphones.” Apple’s plan to “aggressively” ramp up production, however, is now in limbo.

Currently, all finished products are being reserved for Apple’s own retail stores and online store. This puts most of the supply constraints on other retailers. On Amazon, for instance, AirPods Pro are completely out of stock.

With that being said, even directly from Apple, AirPods Pro are still backordered by over a month. Apple CEO Tim Cook acknowledged AirPods supply constraints during Apple’s Q1 2020 earnings call last month, but could not offer a timeline on when supply and demand will come into balance.

Technical Indicators

Overall, the bias in prices is: Upwards.

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

The projected upper bound is: 339.36.

The projected lower bound is: 313.59.

The projected closing price is: 326.48.

Candlesticks

A white body occurred (because prices closed higher 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 31 white candles and 19 black candles for a net of 12 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 82.6893. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 64.02. 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 sell 5 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 111.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 2 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 10 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 3.760 at 325.210. Volume was 8% below average (neutral) and Bollinger Bands were 28% narrower than normal.

Open     High      Low     Close     Volume___
322.570 325.220 320.265 325.210 26,356,384
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 317.68 293.94 233.83
Volatility: 44 27 30
Volume: 38,712,436 30,860,056 28,111,006

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 39.1% above its 200-period moving average and is in an upward 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 bullish on AAPL.O and have had this outlook for the last 117 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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