Apple shares are currently testing an area of interest around the $110/share level ahead of the company’s announcement this week. This lines up with the 38.2% Fibonacci retracement level on the latest swing high and low, making it a potential resistance area.
In addition, the 100 SMA just crossed below the 200 SMA, which suggests that the path of least resistance is to the downside. In that case, at test of the previous lows around $91.58/share might be seen.
On the other hand, a rally past the area of interest could pave the way for a test of the previous highs past $130/share. Stochastic and RSI are both on the move down though, which also suggests a potential decline for Apple shares.
Apple Shares Outlook
Rumor has it that Apple will announce its new iPhone unit on Wednesday, possibly spurring another wave of rallies for Apple shares if the gadget’s features are impressive. However, a disappointing announcement could set the stage for a longer-term decline in Apple shares.
Note that the company is facing a potential decline in revenue from China, as the country recently saw yuan devaluation which would make imports more expensive and less in demand. This could hit Apple sales harder, as the company has slipped to third place when it comes to smartphone sales in China.
Other announcements on software upgrades are also expected this week, along with new apps for the Apple TV. Analysts also predict that a new iPad version might be announced, possibly featuring a larger screen compared to its predecessors.
Investors will also be on the lookout for any clues on the longer-term outlook for the company. Any plans on how to workaround the potential decline in revenues from China could also keep the stock supported in the near term.
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