Short-Term Descending Channel on Apple Shares

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Short-Term Descending Channel on Apple Shares

Short-Term Descending Channel on Apple Shares

Apple shares have slowly been edging lower, forming a descending channel on its 1-hour chart. Price just recently tested the resistance at $98 and seems to be aiming for the bottom at $90-91.

The 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside and that the selloff might carry on. Stochastic and RSI are pointing down but both oscillators have already reached oversold levels, indicating that sellers might already be feeling exhausted.

In that case, a bounce of the mid-channel area of interest around the current levels might take place, especially if risk appetite returns to the markets. Risk-taking weakened yesterday when crude oil prices tumbled after Iran and Saudi Arabia expressed reluctance to curb production.

Fears of a Brexit are also currently weighing on risk sentiment, as this could expose the UK to more financial and economic uncertainty. This does not bode well for the global economy, which is still reeling from the slowdown in China and the emerging nations.

The latest earnings report from Apple hasn’t been exactly so upbeat, as it indicated that iPhone sales may be in for more weakness. Weak demand from China could keep weighing on the company’s revenues in future reporting periods, which explains why Apple shares have been on the decline.

Recent reports indicate that Apple is also having a tough time dealing with the FBI when it comes to privacy issues relating to the unlocking of an iPhone used in the San Bernardino shootings. “The United States government has demanded that Apple take an unprecedented step which threatens the security of our customers,” Cook explained. “We oppose this order, which has implications far beyond the legal case at hand.”

For now, the company is locked in a legal battle with the FBI, which doesn’t appear to be good for Apple shares.

 

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.