Apple Inc. (NASDAQ:AAPL) supplier sees stock plunge after profit warning

Apple Inc. (NASDAQ:AAPL) supplier sees stock plunge after profit warning

Apple Inc. (NASDAQ:AAPL) supplier sees stock plunge after profit warning

Apple supplier AAC Technologies saw its shares drop 13 per cent after the acoustic component maker said it expected first quarter net profit to fall as much as 75 percent due to reduced orders.

AAC Technologies was one of many Apple-dependent suppliers who has been suffering lately as Jobs’ Mob failed to convince anyone sane to spend more money on technology which could be found for much less.

The Hong Kong-listed firm late on forecast January-March profit to fall 65-75 percent compared with the same period a year earlier, and said its gross profit margin would narrow.

“In addition to a usual weak seasonal quarter, the company’s revenue for Q1 2019 is expected to be significantly negatively affected by reduced orders from customers”, AAC said in a stock exchange filing.

AAC supplies acoustic and haptic components to Apple, which last month said revenue from iPhone sales in the December quarter declined 15 percent from the previous year. AAC said profitability would increase due to improvement in its product portfolio, production efficiency and cost control. It also expects customers to upgrade their smartphone offerings.

The price of AAC shares had risen 29 percent so far this year as of the previous market close.  The company will first-quarter earnings at the end of May.

Overall, the bias in prices is: Sideways.

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

By the way, prices are vulnerable to a correction towards 173.48.

The projected upper bound is: 186.27.

The projected lower bound is: 162.60.

The projected closing price is: 174.43.

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 26 white candles and 24 black candles for a net of 2 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 77.6299. This is not an overbought or oversold reading. The last signal was a sell 11 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 64.32. 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 35 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 129.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 12 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 0 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 0.100 at 174.330. Volume was 56% below average (consolidating) and Bollinger Bands were 43% narrower than normal.

Open High Low Close Volume___
173.710 175.300 173.173 174.330 17,070,212

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

Moving Averages: 10-period 50-period 200-period
Close: 171.78 161.23 191.35
Volatility: 10 49 38
Volume: 21,142,988 36,620,968 32,559,338

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 8.9% below its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AAPL.O (mildly bullish). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 21 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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