Apple Inc. (NASDAQ:AAPL) Trade War Impact?

Apple Inc. (NASDAQ:AAPL) Trade War Impact?

Apple Inc. (NASDAQ:AAPL) Trade War Impact?

Apple is currently safe from President Donald Trump and his administration’s decision to increase tariffs on $200 billion worth of Chinese products. Trump last Friday officially increased tariffs to 25% from 10% as the world’s two largest economies try to navigate toward a trade war resolution. Since then, the Chinese government has announced that it will impose tariffs on $60 billion worth of American products in retaliation.

Apple currently remains mostly in the clear as the iPhone isn’t on the list of $200 billion worth of Chinese-made products that face higher tariffs. With that said, Trump also threated to impose a 25% tariff on an additional $325 billion in Chinese imports that haven’t previously been targeted by duties. “Build your products in the United States and there are NO TARIFFS!” Trump wrote Friday on Twitter.

Clearly, any new tariffs are still just threats at the moment. Yet, investors should understand just how important China is to the firm. Apple assembles most of its iPhones in China and works with a large number of American suppliers. Plus, China could target Apple with duties and call for boycotts of its products in a market that is already full of many less expensive, Chinese smartphone options from the likes of Xiaomi and Huawei.

Last quarter, Apple posted adjusted Q2 2019 revenue of $58.02 billion. This marked a 5.1% downturn from the year-ago period and a larger decline than Q1’s 4.5% drop. More specifically, revenue in Greater China tumbled 21.5% from the year-ago quarter to $10.22 billion. This did mark an improvement from last quarter’s 27% drop off in the world’s second-largest economy that includes Hong Kong and Taiwan. Overall, Greater China accounted for roughly 18% of Apple’s total quarterly revenue.

On top of that, iPhone sales tumbled over 17% to hit $31.05 billion and account for over 53% of total sales. Last quarter, iPhone revenue fell 14.9%. Clearly, Apple investors need to watch out for any updates on how the latest round of tariffs between the U.S. and China might impact the firm. For example, Morgan Stanley MS analyst Katy Huberty predicted that a 25% tariff on the iPhone could create a $160 price hike on the iPhone XS. If Apple didn’t pass the costs onto consumers, it could cause AAPL’s earnings to slip 23% in 2020. 

Overall, the bias in prices is: Downwards.

The projected upper bound is: 198.55.

The projected lower bound is: 179.28.

The projected closing price is: 188.92.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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 20.7358. This is not an overbought or oversold reading. The last signal was a buy 2 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 36.85. 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 6 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 6 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 12 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 2.940 at 188.660. Volume was 21% above average (neutral) and Bollinger Bands were 22% wider than normal.

Open High Low Close Volume___
186.410 189.700 185.410 188.660 36,529,676

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

Moving Averages: 10-period 50-period 200-period
Close: 201.79 194.54 192.46
Volatility: 52 31 40
Volume: 38,533,996 29,782,336 34,783,916

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 2.0% below 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 2 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