Apple shares could be in for another strong bounce, as price is currently sitting at a major support zone. The price is finding support at the 50 SMA on the daily time frame and this has held as a dynamic inflection point in the past.
For now, MACD is moving lower, indicating that there’s enough selling pressure for more losses for Apple shares. RSI is also pointing down, which suggests that price could move to the next support zone around $105/share or lower.
Apple Shares Forecast
Apple shares staged a strong rally in early December as traders anticipated more strength in the US economy, particularly in the consumer spending sector. As expected, the GDP for Q3 2014 was upgraded from 3.9% to 5.0%, far better than the projected 4.3% reading.
However, this also sparked profit-taking among US equities later on, as anticipation of monetary policy tightening from the US Federal Reserve led to speculation of tighter credit and weaker spending conditions. This could lead to lower revenues for US companies and lower business investment, which could keep Apple shares gains in check.
A bounce, however, could push price back to its previous highs near the $120/share level. This could be spurred by promises of low rates from the Fed, depending on the FOMC minutes this week. These should shed more light on what Fed head Yellen and her group of policymakers have in mind for the US economy and monetary policy adjustments.
It appears that US equities and Apple shares failed to partake in a Santa Claus rally, which usually takes place at the end of the year and early into the new year. Risk sentiment also appears to be keeping gains limited, as prospects of weak growth in China and other major economies could weigh on higher-yielding assets for the time being.
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