Apple Stock Price and Forecast: Why AAPL is going down after topping out at $150

Update: Apple shares continue to trade without much enthusiasm on Tuesday wit hteh stock down slightly in the first half hour of trading. The market looks like it may be taking a breather as many big tech and meme names suffer with Facebook, Amazon, Netflix and Google all down about 1%. Techniclaly AAPL stock has formed a bearish double top, so it would need to break $150 to cancel this formation out. 

Apple had a strong run into results, meaning that even a 30% beat on the bottom line (earnings per share) has not seen follow-on buyers push the stock much higher. This is the same scenario that played out ahead of the last results when again AAPL stock pushed higher in advance of the results, peaking at $137 just afterward before sliding to the low $120s in the weeks afterward. 

Apple released Q3 2021 results just after the close on Tuesday, July 27. Earnings per share (EPS) were $1.30 versus the $1.00 Wall Street estimate. Revenue was $81.4 billion versus the $72.9 billion estimate. Apple reported Q3 iPhone revenue of $39.6 billion, up from $26.4 billion a year earlier. Apple stock (AAPL) had a little pop just on the release of the numbers, but this swiftly turned around and the stock fell about 1%. Part of the reason for the lackluster reaction may have been some bearish comments on the earnings conference call. Apple mentioned supply constraints for the iPhone and iPad in Q4 and also guided growth to be lower going forward. It was a strong earnings beat, but the relatively downcast comments created some future uncertainty.

Apple key statistics

The previous average of analysts' price targets was $159. Now it is up to $165, so even if the market reaction has not been positive, analysts have upgraded their price targets. Then again, they are always behind the curve.

Apple stock forecast

Apple stock is just sitting on a small volume-based support at $145, the old all-time high. Breaking this should see the move accelerate to $136 as there is no volume until then to support the price. Regular readers will know we use volume profile to identify price levels where a move can accelerate and play options accordingly. If the price accelerates, then an option price increases two-fold. This stems from the underlying stock price move and from the volatility move. Options are also a useful way of managing risk, assuming you are not selling them – a dangerous strategy.

To take advantage of this one, buying a $140 put for August 13 currently costs about $0.55 per share. 

The Relative Strength Index (RSI) is still in a bearish divergence and did not confirm the double top move. It is still trending lower. The Moving Average Convergence Divergence (MACD) indicator has also crossed into bearish territory. 

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