Apple shares saw a pretty nasty selloff on Friday’s trading, as the slump in Asian markets and in equity indices all over the globe spurred a sharp drop. However, looking at the longer-term time frames suggests that the overall trend is still up and that this might be a chance to buy at cheaper levels.
Using the Fib tool on the latest swing low and high on the weekly time frame shows that the 50% retracement level lines up with the previous peaks near the $100/share mark. A larger pullback could last until the 61.8% Fibonacci retracement level near the rising trend line connecting the lows on the same time frame.
Both stochastic and RSI are indicating oversold conditions, although the oscillators haven’t turned up and reflected a return in buying pressure yet. Once that happens, Apple shares could show a bounce and possibly start climbing back to its previous highs.
Apple Shares Forecast
Some stock analysts say that this marks the end of the stock’s stellar gains, though, as the downturn in China could mean negative repercussions on the company’s sales and revenues. Recall that the iPhone’s market share in China slipped to third place, following local company Xiaomi and Taiwan-based Huawei.
Further declines in smartphone and tablet sales in the region could mean lower profits for Apple, which might weigh further in the next round of earnings figures. This could push Apple shares significantly lower, with a break below the $100/share psychological level signaling that further declines are likely.
In addition, the Fed’s cautious outlook for the economy is also keeping equity gains in check. After all, the FOMC might not be able to hike interest rates by September due to a foreseen slowdown in demand and another possible downturn in commodity prices. China’s yuan devaluation might also have an indirect impact on Apple sales, as this would make the company’s products relatively more expensive in the Chinese market.
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