• Apple stock retraces but fails to beak 21-day moving average on Friday.
  • Has Apple bottomed out as a double bottom looks possible?
  • AAPL stock has been falling, and Monday is likely to be a quiet session.

Update October 11: Half glass-full or half glass-empty? Those that have taken a bite of Apple Inc (NASDAQ: AAPL) early on Monday are on the optimistic side, riding over 1% higher as shares change hands at $144.61 at the time of writing. The same goes for those picking it up earlier this month. However, in the past 30 days, the tech giant has been under immense pressure, struggling alongside its peers. Higher bond yields make these leading companies less attractive. The recovery attempt is ongoing, buoyed by reports of upbeat sales for the firm's iPhone 13. 

Friday saw a brief rally for tech stocks after the weak employment number. The weak data led short-term traders to pile into Nasdaq names as the thinking went this will delay Fed tapering and rate rises. However, the bond market was less forgiving and kept yields high. The 10-year yield is now above 1.6%. This forced longer-term players to readjust their thinking again and in effect continue to sell tech and Nasdaq stocks. The reasoning is simple. The US is now at a higher risk of stagflation – the biggest fear of any equity investor. Inflation can rob them of any gains, and higher rates makes bonds and other fixed-income assets more attractive than stocks. Goldman Sachs has cut its US growth forecasts again this morning, the third time this year (actually, the third month in a row!). Apple has mentioned supply chain issues during its last investor presentation, and this is a growing trend. 

Apple 15-minute chart

Apple key statistics

Market Cap $2.3 trillion
Enterprise Value $2.3 trillion
Price/Earnings (P/E) 28

Price/Book

37
Price/Sales 9
Gross Margin 41%
Net Margin 25%
EBITDA $112 billion
52 week low $103.10
52 week high $157.26
Average Wall Street rating and price target

Buy $166.7

Apple stock news

The latest saga in the so-called Epic Games ruling sees Apple appeal the decision and ask a US judge to put on hold some orders requiring Apple to change some App store practices. "The requested stay will allow Apple to protect consumers and safeguard its platform while the company works through the complex and rapidly evolving legal, technological, economic issues," read the filing on Friday.

Separately, CNBC reports that Apple is building a new regional headquarters in Los Angeles that may be indicative of an increased target on Hollywood. 

Apple stock forecast

A lot of conflicting news flow on this one of late, but the chart does show a potential double bottom, just falling short of our $137 support. We need confirmation of this though, and that would come from the Moving Average Convergence Divergence (MACD) crossing and the Relative Strength Index (RSI) getting back above 50. Above $141.67, AAPL stock remains neutral. We will turn mildly bullish above $144.50, which should see confirmation from the RSI and MACD. $134 is a strong support zone with the 200-day moving average and the Volume Weighted Average Price (VWAP) for the year all converging. The point of control is the price with the highest amount of volume, and for 2021 that is at $134.17. This level seems attractive for buying the dip.

FXStreet View: Neutral, bullish above $147, bearish below $141.67.

 

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