Stock markets including Apple stock have been surging higher this year, but they retreated lower last week, which might actually be a good chance to buy certain stocks. The company profits beat expectations for Q3, which is positive for Apple shares, but the technical and the broader fundamental pictures are also important.
S&P 500 and Nasdaq Composite Performance
The S&P 500, a key benchmark index, suffered its steepest one-day decline since early September, dropping 2% to close at recent lows of 5,700. The Nasdaq Composite also fell 2.8%, ending just above 18,000. This broad market sell-off is attributed to decreased investor confidence and uncertainties surrounding the upcoming U.S. presidential election, prompting more cautious sentiment across sectors.
Apple Chart Daily – Will the 20 SMA Hold As Support?
Apple Inc. Stock Performance and Earnings Report
The Apple stock saw a notable pullback, recording its worst weekly performance in nearly three months after failing to break above a resistance level near $240. Despite this dip, Apple’s fiscal fourth-quarter earnings report exceeded expectations, with both revenue and earnings per share coming in above forecasts. Total sales rose by 6%, with iPhone sales contributing strongly. However, a one-time EU tax charge led to a slight decline in net income.
Apple Earnings and Revenue
- Earnings per Share (EPS): $1.64 (adjusted) vs. $1.60 expected
- Total Revenue: $94.93 billion vs. $94.58 billion estimated
- iPhone Revenue: $46.22 billion vs. $45.47 billion estimated
- Mac Revenue: $7.74 billion vs. $7.82 billion estimated
- iPad Revenue: $6.95 billion vs. $7.09 billion estimated
- Other Products Revenue: $9.04 billion vs. $9.21 billion estimated
Technical Levels and Support Zones for Apple (AAPL)
- Current Support: Apple closed the week at $221.91, aligning with the 20-week SMA on the weekly chart, which has recently acted as a reliable support level.
- Potential Buy Zones: If AAPL drops below this moving average, a significant level of liquidity and potential buy orders await at the $200 mark, with additional interest around $190 to $200. Traders seeking to accumulate shares may target this range for buying opportunities.
- Resistance and Breakout Levels: A bounce from $200 could signal a return of buying interest, setting the stage for recovery, while a persistent move below this level may suggest a longer consolidation period.
Market Sentiment and Economic Indicators
A cautious outlook has been reinforced by recent economic data. Core inflation, as reflected in the PCE Price Index, rose 2.7% year-over-year, hinting at continued inflationary pressures. Meanwhile, U.S. Nonfarm Payrolls (NFP) data showed only 12,000 new jobs, a stark miss from the 113,000 forecast, though the unemployment rate held steady at 4.1%.