One of the few companies with a market capitalisation of more than $1trn, Apple enjoys a robust bullish trend fuelled by the strong US economy. With iPhones and iPads still in strong demand, Apple has other revenue streams worth considering – wearables, iMacs, and the recently launched film and news divisions, to name a few.
Warren Buffet, dubbed the world's number-one investor, is one of the proud shareholders, who has proven his loyalty and trust in future Apple stock performance. And while the latest Apple stock news may concern some investors, AAPL stock analysis reveals just a modest consolidation with no meaningful pullbacks.
Latest Apple price news that matters for the stock
The recent coronavirus outbreak in China has shaken the entire globe. At the end of the day, this is a contagious virus that humankind has no vaccine against. We know little about it, and the world fights every day to contain its further spread.
China is one of the world’s largest manufacturers and a big consumer of raw materials. However, demand and supply chains are currently interrupted due to the epidemic. Airlines have cancelled flights to mainland China and parts of Asia. The shipping industry is also suffering, and production levels are hit by people staying home to avoid contact with the virus.
One of the recent Apple stock news shows how important the developments in China are for the rest of the world. Foxconn factories, a Chinese manufacturer of iPhones and other Apple products, announced that the Shenzhen plant remains closed while another factory opens only with about 10 per cent of the workforce, mainly for maintenance purposes.
However, unlike the other companies that also depend on China, Apple stock reacted to the news with only a small pullback. Presently, it seems as if the majority of the US stocks are now mainly driven by the upcoming US presidential election.
After all, Apple is one of the Dow Jones Industrial Average (DJIA) 30 companies, and many times Apple share news comes in second place as important as the trading algorithms lifting the DJIA buy into Apple as well.
Apple price analysis: the stock of opportunities
The recent Apple stock news related to the coronavirus outbreak did not affect the share price much. In fact, the DJIA sits very close to all-time highs, and so does the Apple.
For the right interpretation of the latest Apple price analysis, we need to start with the bigger picture. The top/down analysis shows a rising price for the past three years, with little or no meaningful pullbacks.
During the second half of 2018, the price dipped together with the general US stock market. However, it proved to be just an opportunity for bulls to buy even more shares.
Following a similar pattern seen on the S&P 500 and DJIA charts, the stock has accumulated the energy to break above the pivotal area marked on the graph above. Slowly but surely, it has soared higher to pass the decisive break in the last few months.
Moving forward, this pivotal area might prove important on any significant market pullback due to uncertainties related to the US presidential election or to an escalation of the virus outbreak that might affect the US stock market too.
However, a pullback all the way to horizontal support may prove too much, even for the most bearish possible scenario. If we use a channel to define the rise in the bullish trend, we see that the price recently broke above its upper edge. Moreover, the lower edge acted as dynamic support and resistance every time the price tested it.
The three orange areas marked on the chart illustrate how dynamic support turned into resistance. The logical conclusion is that the next time the price hits the lower edge of the rising channel, the dynamic support should act as a bouncing place again – a place where buyers most likely will step in to send Apple shares higher.
Short- to mid-term Apple price forecast
It looks as if the market is now forming a triangular pattern, and the path of least resistance could be for it to break in the same direction as the trend prior to the triangle's formation.
The move lower or the first segment of the triangle corresponds to the recent uncertainty regarding the coronavirus impact on the Chinese economy and the potential of disrupting supply chains around the world. But Apple pushed back up, keeping intact the series of higher highs and higher lows corresponding to a bullish trend.
What happens next is even more interesting. If the Apple share price reaches a new higher high, it means it will break above the upper horizontal line that marks resistance. The triangle’s measured move points to a minimum distance equal to its largest segment – this translates into the price stretching well above $360.
On the other hand, a break below the pivotal $300 level opens the gates for a bigger decline to the dynamic support level mentioned earlier. As always, the best way to deal with such a situation is to let the market move first and then trade accordingly.
So, what happens next?
Apple is one of the largest companies in the world, valued at more than £1trn. Only a few years ago, such valuation seemed impossible to be reached so fast – yet here we are.
Along with other tech giants in the US, such as Google (GOOGL), Facebook (FB) and Amazon (AMZN), Apple has a big say in how the US stock indices react to market news. Because each company has a different weight in an index's calculation, companies with large weights, such as Apple, easily influence the overall stock market.
The point is that when Apple stock falls, the entire US market has the potential to drop with it, especially indices. And vice-versa, when Apple is on the rise, the DJIA and the S&P 500 rarely post negative days.
Therefore, it is no wonder that Apple and the US stock indices sit very close to all-time highs. Considering the cheap money coming from the Federal Reserve that continues to buy T-Bills and to fund the repo market, the path of least resistance for stocks remains to the upside.
Trade Apple Inc - AAPL CFD
Hence, unless something major happens in the world, as an increased threat from the coronavirus, expect more upside for Apple and the triangle shown in this article to eventually break higher.
Follow the latest Apple share price news at Capital.com to always stay on top of modern financial markets and make rational trading decisions.