Apple just rolled out an update to its iPhone, Apple Watch and AirPods on Wednesday, with a number of subtle adjustments to its lineup – including several new features designed for assistance, such as crash detection and advanced features that can connect to satellites, in case of an emergency.
Historically, Apple’s stock price has fallen several times the day the company launches a new model line. The stock price will rebound, after a few months of launches as the initial sales figures enter. However, that does not mean that there are no challenges in a risky environment. A weak economy could discourage buyers from paying more for new iPhone models. After all, companies are certainly not immune to the ongoing slowdown. However, there may be a market segmentation strategy that companies can use to maintain consumer buying interest in their products.
On a final note, after the last two iPhone announcements, the stock price has made no significant changes, in fact Apple is still down 13% this year towards its first annual decline since 2018. Despite this year’s losses, Apple is still the best performing mega-cap technology stock, as investors still believe the company will take advantage of its customers to get more benefits from its features and services. However, the company’s performance will be seen in the upcoming earnings report in October, whether the company can maintain its growth or not.
One proof that investors may still believe is data. Impressive sales growth, astonishing annual base revenue in a difficult year and in a hostile environment in 2020 and 2021 respectively, despite the start of the pandemic forcing store closures amid widespread lockdowns. This trend continued until the fiscal third quarter ending June 25, Apple’s revenue totaled $83 billion, despite macroeconomic challenges such as inflation and supply chain constraints.
Technical Analysis
Tech stocks have indeed had a hostile year, having seen strong gains last year. But some technology companies are still strong, because the decline in the value of their shares is still in the middle zone, one of which is Apple. Despite hitting 52-week lows this year during the sell-off, prices remain well above their pre-pandemic prices in 2020.
Technically, the $129.06 rebound has ended at $176.14 as the third lower peak, since the stock split. And in 4 weeks running, the price has dropped to near the 50% retracement level which is also close to the resistance level of $151.72 which is now support. Within 5 trading days, the price position has been below the flat 200 Slope EMA. This does not clearly represent, that the asset has entered a bear market, because the EMA line looks flat. However, further downside is certainly possible given that the bearish momentum doesn’t seem over yet. If this happens, the decline in asset prices may be stuck at the level of 61.8%FR ($147.00). On the contrary, a move above the daily high of $160.36 should lead to a rally in the short term.
TipRanks projects Apple’s average price at $183.12 with a high estimate of $220.00 and a low estimate of $136.00. The average price target represents a 17.41% change from the last price of $155.96.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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