Apple Declining Toward Support as iPhone Sales in China Drop
Source: www.tradingview.com
Apple stock has had a tough start to the year and is down close to 9% for the year-to-date. Technically, it is approaching an important support level at $165 (green horizontal line). Its trend-following indicators are in bear mode with the green 5-week EMA below the orange 10-week EMA. Moreover, the momentum is biased to the downside with Apple's weekly RSI below 50 (green rectangle). The longer it stays below 50 the more pressure the stock will be under and the greater the likelihood that the support level will capitulate.
Yesterday Counterpoint Research released a report which suggested that the company had sold 24% fewer iPhones in China in the first six weeks of 2024 over the comparable period last year.
This compounded already bad news out of Europe, where the European Commission is fining Apple nearly $2 billion over "abusive App Store rules" for music-streaming providers. Apple is appealing the fine saying that the commission did not provide any credible evidence indicating that consumers were harmed.
There are other reasons that the stock is under pressure. Last week, Goldman Sachs removed Apple from its US Conviction List, which includes 20-25 "of what we believe to be our most differentiated fundamental Buy ideas across our U.S. stock coverage." Another item which made headlines was the abandonment of the company's car project in favour of a stronger focus on generative artificial intelligence.
Moreover, when Apple released its earnings for the December quarter it was accompanied with a disappointing forecast for its March quarter. Quarterly revenue is forecasted to decline by 5% from the 2023's comparable period to $90 billion, with a decline of close to 10% in iPhone sales.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.