Apple shares have been selling off really sharply these days, breaking below a triple top formation on the daily chart and the 200 SMA. This could be a sign that the stock is in for a massive reversal, especially if the moving averages cross down to confirm a long-term selloff.
Stochastic is already indicating oversold conditions, which means that a bounce is still possible. RSI is moving close to the oversold area as well, suggesting that losses could be pared sooner or later.
Take note, however, that Apple shares have also broken below a long-term rising trend line visible on the daily time frame. The next potential support area is located near the $100/share level.
Apple Shares Forecast
World in Wall Street is that the tumble in Apple shares worsened after the company denied rumors that it is building a mobile virtual network. “We have not discussed nor do we have any plans to launch an MVNO,” an Apple spokeswoman said.
In addition, a report on Xiaomi suggests that the Chinese smartphone maker may be set to take over a larger share of the mobile marketplace in China. The report also showed that Apple fell to third place when it comes to smartphone shipments to China, next to Huawei.
Nonetheless, some analysts still rate Apple shares as a buy since the company reported better than expected earnings data for Q2 the other week. This suggests strong fundamentals could keep the uptrend going and could spur demand for the stock later on. A rebound could still allow the stock to regain ground back to its previous highs past $130/share.
On the other hand, some stock analysts say that the worst is yet to come for AAPL since the downside break of technical levels reflect increased downside momentum and could draw more sellers to the table.
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