The roller coaster ride for Apple shares throughout the last week surrounding Apple’s latest product event has presented plenty of opportunity to trade (see chart below).
Chart: Apple share price surrounding the product event
(chart source: CMC Markets, 11/9/15)
The rise in Apple shares before the company’s latest event and the drop seen immediately after the release of its new products is actually quite typical.
Apple shares do tend to suffer from a bit of good old “buy the rumour, sell the fact” when new products are launched. High expectations will often push shares higher before the release and even if the products are good, shares may drop afterwards once the expectations have been met.
What happens next?
The rise seen in the share price now that the dust has settled is a sign the new products have been well received by investors. Or at least they have not dented confidence in Apple’s general product pipeline.
Other than the surprise option of a stylus for the new iPad Pro called the Apple Pencil available to buy separately for $99, the products were very much in line with rumours (see our pre-event piece here
Apple still doesn’t have the next killer product. Apple TV has potential to disrupt but there appears to be little demand from consumers for apps on their TV. The one exception is games but those ported from tablets and smartphones won’t be a patch on the quality of those produced for consoles anytime soon.
Concerns over the slowdown in China are still rampant in markets and unfortunately for Apple, China is the tech giant’s biggest growth area for iPhones.
As a component of the Dow Jones Industrial Average, the direction of Apple shares will also rest on the direction of the US stock market. The fate of US stocks largely rests with the Federal Reserve and its decision whether to raise interest rates.
Weekly candlestick chart of Apple shares
(chart source: CMC Markets, 11/9/15)
Apple shares bounced strongly after retracing half of the rally since June 2013. However, price has broken its rising trendline, fallen below its 200 day moving average and RSI is below the 50 line which has supported price dips since shares were at $60.
While still above the 200 week SMA, Apple shares may have based, but the speed of the breakdown would suggest the low at $95 is more likely to be re-tested before a new record is made above $135.
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