Technical Update - Apple likely to take out support confirming downtrend
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Apple trading in a falling channel pattern. $140 is in sight due to reports of productions cuts. If this is the first of many bad news from Apple the share price could test key support at 129 during October earnings season
Two weeks ago, I published the analysis “Top and reversal pattern in Apple indicates down trend” https://www.home.saxo/content/articles/equity/ta-apple-14092022
Since then, Apple has been sliding further trading in a falling channel pattern having found some support at around 148.37.
This support is weak however and reports this morning that Apple will cut Iphone production due to slowing demand has given sellers new energy.
Pre-Market Apple is trading approx. 4 % lower and if Apple opens today around that level, it has broken below this minor support. A close today below that level will confirm down trend and selling pressure is likely to accelerate the next couple of weeks. Especially if the share price closes below the lower falling trend line in the channel.
A selling pressure that can push Apple below support 140. However, if more bad news is coming out when we enter earnings season Apple could test the June low around 129.
RSI has been showing negative sentiment since 31st August when the indicator closed below the 40 threshold supporting the bearish picture.
The Share price is below all Simple Moving Averages; 21, 55, 100 and 200 with only the 55 SMA still rising i.e., underlying sentiment is mainly bearish. If Apple shares are to
To reverse this bearish picture a close above 176 is needed. A close above 164.26 will put it on hold.
If Apple closes below 129 it has confirmed medium-term downtrend which could the share price down to the support area around 109-105.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.