Bears Take A Bite Out of Apple! (AAPL)

Hi friends! Welcome to this analysis on Apple! Let's get right to it! Looking at the daily chart for AAPL , we can see that there was a massive gap lower on the open this morning. Yesterday, the stock closed at 157.92 but it opened this morning at 143.98. That's a gap down of nearly 9%, which is an enormous loss for one of the world's most valuable companies. In case you haven't heard, Apple unexpectedly cut it's forward guidance for 2019, escalating fears of a global economic slowdown. Apple's CEO Tim Cook, spoke about the slowdown yesterday on CNBC. Here's what he had to say:

"If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China," Apple CEO Tim Cook told CNBC's Josh Lipton in an interview Wednesday. "It's clear that the economy began to slow there in the second half and I believe the trade tensions between the United States and China put additional pressure on their economy." Apple said it sees first-quarter revenue of $84 billion vs. a previous guidance of a range of $89 billion and $93 billion. Analysts expected revenue of $91.3 billion for the period."

Looking at the chart, we can see that Apple has been in a state of absolute freefall since it broke down from a head and shoulders pattern in October. The stock has fallen an incredible 39% from the all time high, in a matter of a few short months. Today, we can see that price has gaped down and opened the session below the 50% retrace. There is a bit of support through here, generated by lows from April of 2017. However, if AAPL begins to break down below that lateral support, around 140.06, we could see another rapid selloff in the tech giant's stock. A close below the 140 level would put the next target on the rising red trendline support. That would be somewhere in the low 120s, depending on how long it takes AAPL to get down there.

As I write this, I can see that AAPL is attempting to turn to the upside. So, if price can get above the December low of 146.59, we may see a sharp rally to fill today's gap. That, however, is entirely dependent on AAPL's ability to surpass 146.59. If that doesn't happen, I would be on the lookout for a close below 140, which would signal a deeper breakdown, with a test of the rising red trendline support, somewhere in the low 120s.

On the MACD , we can see that APPL's sell-side momentum is at historically high levels. Since November, the MACD has been trading at these extreme lows, showing that the sellers have been absolutely annihilating this stock. Naturally, we should expect a reversion to the mean at some point. However, that reversion may not occur until AAPL makes contact with the rising red trendline support, since it is the most critical nearby support level . With that said, there is also a chance that we could see a gap fill attempt, it price closes above the 146.59 level, as mentioned above. So, that too could cause a sharp relief rally, coupled with a rapid rise in momentum.

Looking closer at the MACD , we can see that it has printed a small bullish divergence , as price has made extreme advancements to the downside, while the MACD has printed a higher low (green trendline .)

Ultimately, a close below 140 will put the rising red trendline in play, while a close above 146.59 will put an upside gap fill in play.

I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.

***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***

This is one shady company that deserves to fail.
The GREAT GREAT depression incoming
+2 Reply
Bitcoin does a 80% retracement over 1 year while Apple does a 50% in 3 months. Wonder which asset class is a bubble!
+6 Reply
Akhokhar86 emailsandip
@emailsandip, The difference is, only one of those is worth buying today. ;-)
+1 Reply
Was hoping you'd cover this. Thanks Magic.
+1 Reply
ey apple, ey apple, knife!
+2 Reply
Hey Magic! Similar to BTC, APPL finds always support at 200 WMA which is practically hitting now (141) last bounce was on may ‘16
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