Apple Inc. (NASDAQ:AAPL) slowing iPhone sales and rising trade tensions is going to batter Apple in the near-term
Apple’s growth prospects will continue to suffer from slowing iPhone sales and rising trade tensions between the US and China, according to a new report from UBS. However, over the long-term, prospects for the company will remain strong as it expands into new segments such as 5G and virtual reality.
The in-depth report, authored by UBS equity analyst Tim Arcuri, surveyed 8,000 consumers across six countries, and highlights slowing replacement cycles in the US and UK alongside a shift in China towards low-cost replacements from Huawei and Xiaomi.
As a result, Arcuri lowered his 2019 earnings estimates, citing the impact these factors over the short-term.
Apple also faces risk of a backlash following the US Department of Commerce’s placement of Huawei on its “Entity List,” which means US companies require a license to supply the Chinese telecom giant with services, microchines, and other components.
Apple is not a direct supplier of Huawei, but increased tensions may limit the company’s sales in the region. Earlier this week, a Goldman Sachs report estimated that up to $15 billion of Apple’s profitability, nearly a third, derives from the Greater China region.
Despite the difficult near-term outlook, Arcuri maintained his confidence in Apple’s long-term prospects.
“After a year that is impacted by China demand slowdown and elongating replacement cycles, we think iPhones can grow as these headwinds abate,” he wrote. “A potential new form factor and 5G technology could be upgrade drives in the future.”
Arcuri also highlighted Apple’s large services segment, which delivers apps to users, as well as more far-flung areas such as “video streaming, healthcare, news aggregation service, autonomous vehicle ecosystem, among others” that could drive future growth.
Arcuri cut his price target from $235 to $225, still 25% above current trading. He maintains a “buy” rating on the stock.
Apple is up 14% year to date.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 189.59.
The projected lower bound is: 169.65.
The projected closing price is: 179.62.
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 27 white candles and 23 black candles for a net of 4 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 7 falling windows in the last 50 candles–this makes the current falling window even more bearish.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.4629. This is not an overbought or oversold reading. The last signal was a buy 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 32.41. 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 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 -114.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 19 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed down -3.120 at 179.660. Volume was 24% above average (neutral) and Bollinger Bands were 90% wider than normal.
Open High Low Close Volume___
179.800 180.540 177.810 179.660 36,529,736
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 187.37 195.85 191.99
Volatility: 44 33 40
Volume: 36,087,960 30,599,454 34,544,276
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.
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 6.4% 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 moderate flows of volume out of AAPL.O (mildly bearish). Our trend forecasting oscillators are currently bearish on AAPL.O and have had this outlook for the last 9 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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