After consecutive days of strong gains, AAPL stock had a sharp selloff recently once prices hit the $120/share area. This was probably where plenty of profit-taking and sell orders had been waiting, triggering a sudden drop when the level was hit.
In addition, the risk-off environment sparked by the recent tumble in oil and gold prices also carried over to US equities. Recall that the Swiss gold referendum led to a sharp decline for precious metals while the OPEC decision to keep production levels on hold also led to a drop for oil.
AAPL Stock Forecast
The path of least resistance for this share is still to the upside though, as the influx of orders for Apple gadgets in the Thanksgiving sales and the upcoming December holidays could mean more revenue and profits for the company. Price appeared to find support at the $112.50/share level as a long spike formed when the stock made a quick rebound afterwards.
The price is still far from the 50 SMA, which has held as a dynamic support zone for the stock recently. A deeper pullback could lead to a test of the $110/share support area or the $105/share mark around the 50 SMA.
The bullish candle yesterday indicates that buying pressure is returning for AAPL stock, as many took the recent dip as an opportunity to buy shares at better prices. This led to a quick price bounce recently, which might set the tone for future trading movement.
If AAPL stock resumes its climb, price could head back to the previous highs around the $120/share level and possibly go beyond it. Traders could target the $125/share level next if sentiment keeps up in the December holidays, plus the expected Santa Claus rally before the year officially comes to a close. Potential profit-taking could lead to weaker gains though.
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