Apple shares are still in the middle of a correction, as price is retreating from its previous highs and edging closer to the broken resistance at $120/share. RSI is also moving down from the overbought zone, confirming that sellers are in play, while MACD is indicating similar conditions.
For now, the shorter-term 50 SMA is moving above the longer-term 100 SMA, suggesting that the uptrend is likely to stay intact. Apart from that, the 50 SMA might hold as a dynamic support zone, as this also lines up with the broken resistance.
Apple Shares Outlook
Talks of a potential Fed rate hike later in the year, which could be highlighted in the upcoming FOMC statement, are weighing on US equities lately. This has sparked the ongoing correction in Apple shares, as investors worry that higher interest rates could restrict credit and lead to lower spending.
If the upcoming Fed statement suggests that monetary policy tightening is imminent, Apple shares and other US equities could chalk up a few more losses. On the other hand, if the Fed retains its cautious stance and emphasizes that rates should stay low for the time being, risk appetite could surge and keep higher-yielding assets afloat.
Apple shares could resume their rally around the $119-120/share support levels and possibly head back to its previous highs at $132.50/share. On the other hand, a deeper pullback could lead to a move towards the 200 SMA, right around the $105.50/share support area, which has held as a floor late last year.
Analysts have retained their buy rating on Apple shares after the company announced its new Macbook products earlier this month. In fact, some have even wanted to add more Apple shares to their portfolio, although their risk management rules prevent them from doing so. Nonetheless, most investors are still holding out for the sales figures of the newest products to have a better idea of how the company is doing.
To contact the reporter of the story: Jonathan Millet at email@example.com