Fundamental Analysis
Apple, the heavyweight of NASDAQ, entered in a bear territory a few days and dropped below the critical level of $190. This was primarily because analysts are worried that the company doesn’t have another unicorn product in its assembly line. Well, we don’t think that Apple’s stock is going to follow the same path of Nokia. Remember, Nokia used to be the pioneer of the industry at one point in time. But look where it is now and more importantly why? Of course lack of innovation. Similar signs are emerging for Apple as well, if you look at the iPhone cycle, we have not seen any phenomenal changes. How many people really need to upgrade their iPhone every year just because the processor is a little faster now or they have removed the home button. Big deal. The music and storage business for Apple is good but nothing innovative there. Apple’s watch is the least innovative product that the industry can see.
Nonetheless, I think Apple still has some time to get its act together if it wants to avoid a similar fate.
Technical Analsysis
In terms of technical analysis, the price is clearly trading in a downward trend on a 4-hour time frame. The selling pressure is intense and this is because the price has broken out of the downward channel to the downside. The price is testing the lower line of the downward channel and if it fails to break above this mark, it will confirm that the current corrective move wasn’t supported by the bulls. Another confirmation of a strong bear trend comes from the fact that the 50-day moving average (shown in yellow) is trading below the 100-day moving average (shown in green).
The RSI is trading in an oversold zone. Any reading below or near enough 30 is considered as oversold and this sends a bullish signal and any reading above 70 or near enough 70 shows it is overbought. This sends a bearish signal.
The Balance of power is also controlled by bears and the indicator is firmly sitting in the negative territory.
