Hello everyone, as we all know the market action discounts everything :)
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On August 24 I posted my analysis on the Apple stock and warned that a big divergence has been found between the market and the RSI and MACD indicators which usually indicates a drop in the market value and we can clearly see that it turned out to be a true sign.
Fear of contagion from China's Evergrande's potential collapse drove investors out of equities in a rush for safety on Monday, with the S&P 500 and Nasdaq suffering their largest daily percentage drops since May.
(NASDAQ:AAPL) was among the biggest drag on the Nasdaq and the S&P 500, Where the stock price dropped from 156.80 to 141.05. That's more than a 10% drop in less than 10 days. The short-term trend is negative, but the long-term trend is still positive. So although the long term is still positive, this may be a trend turning.
Possible Scenarios for the market :
Scenario 1 :
The Market has broken the support line at 144.94 and now it looks like it will be headed to the support zone located at 138.42 where the Main battle will happen that will determine the direction of the market for the next period of time. If the bulls were able to gain control back over the market then we will be seeing a bounce in price that could lead the market to go back up but the buyers will have to show great power to be able to drive the price back up.
Scenario 2 :
The Market is nearing the second support at 141.88 and it looks like the bears are gathering more power by the minute and they will be able to push the market to 138.42 line the Bears will try to break that support in hope to push the market even lower and if there were able to do so then we might see a big drop happening in the stock price.
Technical indicators show :
1) The market is below the 5 10 20 50 MA and EMA (bearish short-term signs) but above the 100 and 200 MA and EMA (still bullish for the long-term) 2) The RSI is at 35.70 and looks like it could be headed to the oversold zone. A big divergence has been found before the drop 3) The ADX is at 22.42 showing that the market is trending with a negative crossover between FI+ (14.60) and DI- (31.11).
Daily Support & Resistance points : support Resistance 1) 144.94 1) 148.00 2) 143.82 2) 149.94 3) 141.88 3) 151.06
Fundamental point of view :
The S&P 500 suffered its biggest slump since May, amid fears a debt crisis at China Evergrande Group could spark credit crunch in China's crucial real estate sector, leading to a potential economic crisis in the world's second-largest economy. China Evergrande Group, the second-largest property company in China, has more than $300 billion in liabilities, and reports suggest it won’t hit an interest payment deadline on its offshore bonds due Thursday.
Tech participated in the broad-based selloff as investors appeared to take a breather from the ‘buy the dip’ mentally ahead of the Federal Reserve’s two-day meeting starting Tuesday. Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), ended mostly more than 3% lower. According to investing.com
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice. If you have any questions please ask and have a great day !!