As predicted in an earlier article, Apple shares found resistance at the broken support around $123.25/share just past the 61.8% Fibonacci retracement level on the corrective wave. The 200 SMA also held as a dynamic resistance level, keeping further gains in check and allowing the stock to resume its impulse wave.
The short-term 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside. RSI is on the move down, also indicating that sellers are in control of price action.
Using the Fibonacci extension tool shows the next potential support levels for Apple shares. Price could fall to the 38.2% near-term Fib extension support at $108-$110, which has held as an area of interest in the past or to the swing low near $90/share. A move towards the full extension to $84/share could confirm that a longer-term downtrend is in order.
Apple Shares Outlook
The increased likelihood of Fed tightening in December is keeping US equity rallies restrained, as the prospect of higher borrowing costs could weigh on consumer spending. In addition, this could also keep business investment in check, putting a drag on revenues and profitability.
In company news, iPad sales were reportedly down 20%, marking its seventh quarterly decline. However, Apple data shows that this was mostly a result of its own larger-screen smartphone products cannibalizing iPad sales, in effect still keeping its own consumers.
In addition, a report by the Wall Street Journal revealed that Apple is in talks with Venmo for a possible bank deal involving P2P payments using Apple Pay. This can enable smartphone users to transfer funds to each other simply by using their own phones.
The company is already discussing with financial institutions like JPMorgan, US Bank Corp, and Wells Fargo in linking users’ credit cards or checking accounts to iPhones.
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