Apple Inc. (NASDAQ:AAPL) should investors take Apple’s downturn as a chance to buy?

Apple Inc. (NASDAQ:AAPL) should investors take Apple’s downturn as a chance to buy?

Apple Inc. (NASDAQ:AAPL) should investors take Apple’s downturn as a chance to buy?

Shares of Apple AAPL have tumbled 24% in the last three months as part of the larger market pullback. But investors do have legitimate concerns about Apple going forward as iPhone unit sales slow. Still, the question is should investors take Apple’s downturn as a chance to buy AAPL stock at a discount?

The Worries

Last week, a Chinese court ordered a sales ban on some older iPhone models in the world’s second-largest economy after it ruled in favor of Qualcomm QCOM in a patent lawsuit. Enforcement isn’t a threat just yet, but any setbacks in China could harm Apple as it looks to expand in Asia.

With that said, Apple’s new higher priced iPhones, which have helped boost the company overall, have hindered its pursuit for expansion in potentially massive markets such as India, where many customers want to pay much less for their smartphones.

Worse yet, the number of iPhones shipped in India has fallen 40% so far this year compared to 2017, according to a new Wall Street Journal report . Plus, Apple’s market share dipped from 2% to 1%. Going forward, Apple executives will have to figure out a way to offer products at more competitive price points in markets where major growth is still possible.

Apple is a few years removed from solid year over year iPhone unit growth. Last quarter, iPhone revenues surged 29% to help total revenues climb 20%. However, iPhone unit sales came in flat from the year-ago period. Apple also seemed to confirm that its days of meaningful iPhone unit growth are over after executives announced that they would no longer break down smartphone unit sales.

Price Movement

As we mentioned at the top, Apple stock has fallen over 24% in the past three months. AAPL’s recent decline, which has coincided with drop-offs from other FAANG powers Facebook FB , Amazon AMZN , Netflix NFLX , and Google GOOGL , helped push Apple stock down 5% on the year.

Apple stock closed regular trading Tuesday up 1.30% to $166.07 per share, which marked a 29% downturn from its 52-week high of $233.47 a share. With that said, investors can see that Apple stock, along with its broader industry, has been resilient over the last decade.

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 193.63.

The projected upper bound is: 179.83.

The projected lower bound is: 149.98.

The projected closing price is: 164.91.

Candlesticks

A white body occurred (because prices closed higher 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 25 white candles and 25 black 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 23.1674. This is not an overbought or oversold reading. The last signal was a buy 6 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 34.17. 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 13 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 -87. This is not a topping or bottoming area. The last signal was a buy 0 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 11 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 2.130 at 166.070. Volume was 9% below average (neutral) and Bollinger Bands were 11% narrower than normal.

Open High Low Close Volume___
165.380 167.530 164.390 166.070 33,841,520

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

Moving Averages: 10-period 50-period 200-period
Close: 169.37 196.66 194.21
Volatility: 37 47 34
Volume: 42,239,060 41,431,848 32,002,122

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 14.5% 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 47 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH