Apple’s China troubles
Apple (AAPL) confirmed its Chinese iPhone sales troubles yesterday after the market closed. Yesterday, in a press release, AAPL CEO Tim Cook not only blamed falling Chinese iPhone sales but also indirectly hinted at many other challenges Apple could continue to face. The company revised its first quarter of fiscal 2019 (which ended on December 29) revenue guidance to about $84 billion from its earlier guidance of revenue between $89 billion and $93 billion. Apple also lowered its gross margin guidance to about 38%, compared to a range of 38%–38.5% provided earlier. Let’s take a look at some key support levels in Apple’s stock as the sell-off intensifies.
Key support levels
Yesterday’s Apple news triggered a huge sell-off in the stock on Thursday. At 10:45 AM today, the stock posted its daily low so far of $142.09, down about 10.0% from its previous session’s closing price.
Immediate horizontal support in Apple stock lies at $142.00. A violation of this level, in the coming session, could attract renewed selling pressure toward the next major support level near $133.00. The 14 days RSI (relative strength index) indicator was at 38.2, on the verge of entering oversold territory. The RSI indicator’s reading near or below 30 suggests severe weakness in the underlying momentum.
So a bounce-back in the stock could precede another round of sell-offs in the near term.
Today at 12:26 PM, AAPL stock was down 8.3% while the S&P 500 Index and NASDAQ Composite Index (QQQ) were down 1.6% and 2.0%, respectively, for the day.