Apple Stock News and Forecast: Why AAPL will rally 2% on Tuesday?
- Apple shares slid on Monday as fears over Omicron hit markets.
- AAPL hit by negative equity sentiment after Senator Manchin fails to back Biden plan.
- Apple should rebound on Tuesday as markets hope for a revised Biden plan.
Apple stock fell 0.8% on Tuesday as broad-based selling hit equity markets. The breadth indicators were at least consistent with only 78 stocks in total on the day finishing in the green. Fears had been ongoing late last week about the new Omicron variant. Senator Joe Manchin then put the boot into equities on Sunday when he said he could not back President Biden's Build Back Better plan. This plan is key for Biden but also significant for US GDP growth. In fact, it is so important that Goldman Sachs issued a note on Sunday evening revising down their forecasts for US GDP on the back of Manchin's comments. This then was the perfect storm for equities, and they fell sharply on Monday. News from Europe was not good with Omicron-enforced lockdowns becoming widespread.
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Apple stock chart, 15 minute
Apple stock news
Apple did manage to recover somewhat as the day progressed. There were various rumours circulating on Monday about the next iPhone 14 model. We are barely getting through the iPhone 13, but Apple Insider had a report detailing that the next iteration, the iPhone 14, will have a 48 megapixel camera. The report says a folding pixel will debut for the iPhone 15. Reuters has an exclusive story reported this morning that Foxconn's India plant near Chennai is to remain closed all this week due to employee protests, which began as a result of a food poisoning incident. Foxconn is a major supplier to Apple.
Apple stock forecast
We are still forecasting a strong recovery in equity markets today and see Apple rallying despite the Foxconn news mentioned above. Apple has perfectly retraced to its 21-day moving average and this line has held the move since October. Apple has already suffered three down days in a row, so odds on a fourth are lessening. Apple has not put in four consecutive days of losses since October 8.
We do not expect the rally to be sustained though. The medium to longer-term indicators remain bearish. We have had a crossover in the Moving Average Convergence Divergence (MACD) and a declining Relative Strength Index (RSI). Short-term resistance sits at $174 from the volume profile. The double top is still in play following last week's declines.
Apple chart, 30-minute
Resistance on the daily chart is the all-time high at $182. Failure has in place a double top and a bearish sequence initiated. Support currently from the 21-day moving average at $168 should see a small bounce today but will not hold much longer. $157 is stronger support.
Apple chart, daily
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
