The trade: Apple stock under pressure following product launch

(AI video summary)

This video was created on 12 September for IG audiences by ausbiz.

Apple shares: short-term weakness, mid-term optimism

IG's Hebe Chen breaks down the technical outlook for Apple's share performance following its latest product reveal. The company introduced a new iPhone, Apple Watch, and its new artificial intelligence feature, Apple Intelligence, drawing attention from both fans and investors.

Chen shared a cautious view on Apple’s stock in the near term, but with a more positive outlook over the mid-term. “I’m bearish in the short term,” she explained, “but more optimistic in the mid-term.” She noted that Apple’s share price historically underperforms in September, except in 2019. Over the past six years, September has typically seen a decline in Apple’s stock, followed by a recovery in the months afterward.

This pattern, according to Chen, suggests that while the stock might face pressure in the near term, it often sees a rebound in the following months as market sentiment stabilises. September typically brings Apple into the headlines with its product launches, but the real support for the stock tends to come a month or two later.

Technical analysis shows signs of short-term weakness

Chen highlighted technical indicators pointing to further near-term weakness for Apple shares. The stock is currently trading below both the 20-day and 50-day moving averages, a signal that near-term momentum remains negative. Despite a recent price jump, Chen sees hesitation in the stock market.

She also pointed out a double top pattern on the chart, similar to the one observed between December and February, which indicates that there could still be room for further price declines. Chen identified key support levels, particularly at the 8.2 Fibonacci retracement level, around $218. If the price fails to hold above this level, she expects it could fall towards the 100-day moving average, near $207.

Positive mid-term outlook

Despite the short-term challenges, Chen is more bullish over the mid-term. She believes that as more data on Apple’s sales emerges, there is significant potential for the stock to rebound.

In conclusion, while near-term pressures may lead to further declines, the mid-term offers more promising opportunities for investors once the initial volatility surrounding the product reveal fades.