Apple Inc. (NASDAQ:AAPL) Stock Falls, More Bad News for Investors

Apple Inc. (NASDAQ:AAPL) Stock Falls, More Bad News for Investors

Apple Inc. (NASDAQ:AAPL) Stock Falls, More Bad News for Investors

Apple AAPL, +1.59% stock has fallen by more than 10% since the company issued a revenue warning. The coronavirus outbreak in China has impacted Apple’s business. The company closed its China stores in a bid to reduce the spread of the deadly virus. While Apple has started to reopen stores, its business remains slow. Consumers have minimized their movements, which impacts the demand for iPhones. According to a Bloomberg report, the company’s iPhone sales in China fell in January. The company expects a bigger decline in February.

The coronavirus outbreak has also impacted iPhone production. Foxconn, the company that manufactures iPhones, is struggling to resume full production at its Chinese plants.

Due to the weak demand and possible supply constraints, Apple doesn’t expect to hit its revenue target for the quarter ending in March. The company expects the March quarter revenue to be $63 billion-$67 billion.

However, there could be an even bigger blow for Apple. Reuters reported that the coronavirus situation in China could delay the company’s iPhone launch plans. Apple usually introduces new iPhone flagships in September. The new products contribute significantly to iPhone sales.

Ahead of the September launch, Apple engineers travel to China to meet manufacturing partners there. The trips start in the first months of the year to ensure that the new iPhones will be ready on time. However, travel restrictions to China might cause delays in this year’s iPhone launch schedule.

The iPhone is Apple’s biggest business. In the company’s first quarter of fiscal 2020, iPhone sales contributed 61% of the total revenue. Therefore, weakness in the iPhone business could weigh down Apple’s overall results. The coronavirus has been a big challenge for the company.

If the coronavirus situation gets worse and significantly reduces iPhone sales, Apple’s services business could also take a hit. For example, selling fewer iPhones could result in low App Store downloads and less app revenue for Apple. Notably, 2020 is the year that Apple plans reach about $50 billion in annual services revenue.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 309.03.

The projected lower bound is: 277.11.

The projected closing price is: 293.07.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 15.4899. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 36.63. 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 18 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 -165.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 8 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 23 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 4.570 at 292.650. Volume was 71% above average (neutral) and Bollinger Bands were 48% wider than normal.

Open     High      Low     Close     Volume___
286.530 297.880 286.500 292.650 49,678,432
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 313.19 306.51 240.97
Volatility: 42 33 31
Volume: 35,429,796 33,563,388 28,209,930

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 21.4% above its 200-period moving average and is in an downward 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 bearish on AAPL.O and have had this outlook for the last 4 periods.

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