Apple Stock Price and Forecast: Five reasons why AAPL stock is set to fall
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UPGRADE- Apple stock trades totally flat on Monday, barely registering a change.
- AAPL stock still sitting just under all-time high.
- Apple has not pushed on from results despite those results beating estimates.
Apple put in a muted shift on Monday with the stock barely registering any change at all. The daily range (high to low) was a mere 118 ticks, so not many intraday scalping opportunities either. The stock matched the overall sluggishness in the market, with the main indices closing little changed. Apple stock closed the day at $146.09 for a loss of just 0.03%.
As a result, it is time to hone the unwritten extra skill of trading we have recently mentioned: patience. We need to wait for an opportunity to present itself, so we do not suffer from being mired in choppy trading, building up our commission charges and hurting our account. We need to learn to wait for when the risk-reward is skewed in favour of more reward than risk.
To recap, Apple released Q3 2021 results on Tuesday, July 27. Earnings per share (EPS) were $1.30 versus the $1 Wall Street estimate. Revenue was $81.4 billion versus the $72.9 billion estimate. The tech giant reported Q3 iPhone revenue of $39.6 billion, up from $26.4 billion a year earlier. Apple stock attempted to push on once results were out but failed to hold any gains.
Those results look pretty decent, but Apple stock had run up sharply ahead of the numbers, so the reaction since has been disappointing. FXStreet has been bearish on the stock since it failed to break above $150, and we maintain that bearish stance after Monday's benchwarming by Apple stock.
Apple key statistics
| Market Cap | $2.4 trillion |
| Enterprise Value | $2.1 trillion |
| Price/Earnings (P/E) | 29 |
|
Price/Book |
38 |
| Price/Sales | 9 |
| Gross Margin | 41% |
| Net Margin | 25% |
| EBITDA | $112 billion |
| Average Wall Street rating and price target |
Buy $165 |
Apple stock forecast
As mentioned we are bearish on the stock for the short term, but we need a few things to happen soon or else this phase begins to look more like a consolidation pattern just below all-time highs and remains in an uptrend. That generally means continuation, but we have a few reasons why we think this is not the case and so remain bearish.
1. Apple stock fell after a solid results release. Usually, when a stock falls on good news it is a sign that something is not well with the underlying sentiment.
2. Apple was a bit cautious on the post-earnings conference call, striking a downbeat tone.
3. A potential double top formation at $150 is still evident. Importantly, this is not yet confirmed or triggered. Breaking the valley from the first top confirms this bearish technical view. The main momentum oscillators Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI) and Commodity Channel Index (CCI) are all trending lower despite Apple setting a double top. This is a bearish divergence.
4. Apple is trading below the short-term moving averages.
5. We can see from the volume profile bars to the right of our chart below that if/once Apple stock breaks $145 the volume thins out sharply, meaning the price should quickly accelerate to $137 and a higher volume zone.
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- Apple stock trades totally flat on Monday, barely registering a change.
- AAPL stock still sitting just under all-time high.
- Apple has not pushed on from results despite those results beating estimates.
Apple put in a muted shift on Monday with the stock barely registering any change at all. The daily range (high to low) was a mere 118 ticks, so not many intraday scalping opportunities either. The stock matched the overall sluggishness in the market, with the main indices closing little changed. Apple stock closed the day at $146.09 for a loss of just 0.03%.
As a result, it is time to hone the unwritten extra skill of trading we have recently mentioned: patience. We need to wait for an opportunity to present itself, so we do not suffer from being mired in choppy trading, building up our commission charges and hurting our account. We need to learn to wait for when the risk-reward is skewed in favour of more reward than risk.
To recap, Apple released Q3 2021 results on Tuesday, July 27. Earnings per share (EPS) were $1.30 versus the $1 Wall Street estimate. Revenue was $81.4 billion versus the $72.9 billion estimate. The tech giant reported Q3 iPhone revenue of $39.6 billion, up from $26.4 billion a year earlier. Apple stock attempted to push on once results were out but failed to hold any gains.
Those results look pretty decent, but Apple stock had run up sharply ahead of the numbers, so the reaction since has been disappointing. FXStreet has been bearish on the stock since it failed to break above $150, and we maintain that bearish stance after Monday's benchwarming by Apple stock.
Apple key statistics
| Market Cap | $2.4 trillion |
| Enterprise Value | $2.1 trillion |
| Price/Earnings (P/E) | 29 |
|
Price/Book |
38 |
| Price/Sales | 9 |
| Gross Margin | 41% |
| Net Margin | 25% |
| EBITDA | $112 billion |
| Average Wall Street rating and price target |
Buy $165 |
Apple stock forecast
As mentioned we are bearish on the stock for the short term, but we need a few things to happen soon or else this phase begins to look more like a consolidation pattern just below all-time highs and remains in an uptrend. That generally means continuation, but we have a few reasons why we think this is not the case and so remain bearish.
1. Apple stock fell after a solid results release. Usually, when a stock falls on good news it is a sign that something is not well with the underlying sentiment.
2. Apple was a bit cautious on the post-earnings conference call, striking a downbeat tone.
3. A potential double top formation at $150 is still evident. Importantly, this is not yet confirmed or triggered. Breaking the valley from the first top confirms this bearish technical view. The main momentum oscillators Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI) and Commodity Channel Index (CCI) are all trending lower despite Apple setting a double top. This is a bearish divergence.
4. Apple is trading below the short-term moving averages.
5. We can see from the volume profile bars to the right of our chart below that if/once Apple stock breaks $145 the volume thins out sharply, meaning the price should quickly accelerate to $137 and a higher volume zone.
Like this article? Help us with some feedback by answering this survey:
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