Apple Inc. (AAPL) used to be the biggest company in the world by market cap when it hit $1 trillion over the summer. How soon we forget.
AAPL is in the news this morning as President Trump told the Wall Street Journal that he isn't likely to hold back on lifting tariffs on the current basket of goods to 25% on Jan. 1, and could impose levies on the second basket if China doesn't come to the table to deal. That basket includes consumer electronics such as iPhones.
Let's see what is being discounted in the price action and what might extend the downtrend.
In the daily Japanese Candlestick chart of Action Alerts PLUS holding AAPL, below, we can see a pretty unsettling decline the past two months. Monday's price action looks like a bullish hammer pattern but we need to see confirmation Tuesday. Prices are well below the declining 50-day simple moving average line and the cresting 200-day line. I can see three downside price gaps signaling some anxious or aggressive selling.
The daily On-Balance-Volume (OBV) line shows a peak back in early September and lower peaks in October and the beginning of November giving someone fair warning that buyers' resolve was weakening. The OBV line is still pointed down but also above the level seen in July.
In the bottom panel is the 12-day price momentum study. There is no bullish divergence yet between the price action and the momentum indicator but we could see downside momentum slow in the days ahead.
In the second daily Candlestick chart of AAPL, below, I have included two overbought/oversold indicators. The 14-day Relative Strength Index (RSI) and the Slow Stochastic indicator are in what is normally considered oversold territory. Being oversold is not a buy signal as prices can get more oversold and stay in that condition for a while.
In this weekly Candlestick chart of AAPL, below, we can see a bearish alignment of the indicators. No positive clues here.
In this Point and Figure chart of AAPL, below, we can see strong support at and below the market using the volume at price information on the left scale -- lots of volume has been traded in the $176 to $163 area.
Bottom-line strategy: Prices are oversold and potentially bearish news on AAPL is front and center on financial websites. Prices are likely to open lower Tuesday morning but if the selling is exhausted in the first hour or so of trading it will be a short-term positive. A lower open and higher close would be bullish.