The relief rebound in Wall Street continued overnight despite a delayed iPhone X launch, which sent Apple’s share price lower. 

The highlight of Apple’s new product launch is the introduction of a high-end iPhone X which will be sold at US$999.
 
Innovative features such as facial-recognition and on-screen gestures which replace the home button will distinguish the iPhone X from other competitors and thus help to strengthen Apple’s leadership in the smartphone industry. The iPhone X is set for release only on 3 November, well after Apple’s fiscal year close at the end of the third quarter. The share price pull-back largely reflects disappointment due to this delay. 

Apple’s share price is trading at around 18 times trailing price-to-earnings, which is well above its five-year average of 13 times P/E after almost 39% year-to-date gains. The company must demonstrate sales growth in the quarters to come in order to convince the market that its current valuation is reasonable. 

Major US indices extended their gains last night, with the S&P 500 index closed at a record high at 2,495 points. Strengthening of the US dollar reflected revitalised investor confidence as the United Nations agreed on stronger sanctions against North Korea, and worries surrounding Hurricane Irma diminished somewhat. 

Weakness, however, came through the Asian markets’ opening today, with the Hang Seng and the Straits Times Index both trending lower. Profit taking could be one reason behind this technical pullback. Technically, the Hang Seng Index is facing strong selling pressure at 28,000 points – a psychological resistance level. The market needs to clear above this strong level before heading toward the next major resistance at 28,900 points. 

Technical Analysis:

Apple

  • Facing some resistance at the 38.2% Fibonacci extension level at the 161 area 
  • 10-Day Simple Moving Average sloped upwards
  • SuperTrend (10,3) remains in bullish set-up, suggesting uptrend remains intact
  • Momentum indicator MACD has shown signs of weakness 


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