Apple stock is teetering on key support as it provides a disappointing update to its iPhone outlook.
Apple (AAPL) – Get Apple Inc. Report stock made some notable headlines over the weekend, curbing its iPhone outlook.
That’s as production in China takes a hit due to additional covid lockdowns. Lockdowns in China have been more stringent than in many parts of the world and, at least in Apple’s case, that’s having a real-world impact in its busiest quarter.
That said, Apple stock has been wavering over the past few days as mega-cap tech comes under pressure.
Shares faded 11.1% last week as the stock quietly suffered its worst weekly loss since March 2020.
Despite the decline, Apple stock is down 25.8% from its all-time high, which is 10 percentage points better than the Nasdaq Composite and better than all of FAANG (and Microsoft (MSFT) – Get Microsoft Corporation Report).
The stock has faded from its post-earnings gain — the only mega-cap tech stock to rally on earnings this quarter — but it’s not exactly breaking down despite today’s news.
Trading Apple Stock on iPhone Production Update
Weekly chart of Apple stock.
Chart courtesy of TrendSpider.com
For the most part, Apple stock has been chopping between $140 and $170 over the past year.
The stock initially rallied on earnings in October, but those gains have since faded as shares struggle with the 50-week moving average (roughly translated to the 200-day moving average for investors using a daily chart).
For the most part, Apple has avoided closing below $137 on a weekly basis for the past 12 months. In fact, it has done so just once.
With today’s high near $138, it’s clear this $137 to $138 zone remains a key pivot area for the stock. If Apple can’t regain this area, then the 2022 lows near $129 remain in play.
Below that would open the door down to the $118 to $120 area, where Apple stock would be 35% off its all-time high. For long-term investors, this may be enough of a discount to draw in some buyers.
If the stock continues lower, the 200-week moving average near $110 would be another area of interest.
On the upside, a move back over $138 — and preferably a close above it — puts the mid-$140s in play. Above that could put $150-plus in play, but the momentum is not with the bulls, even if support holds in the short term.
Above $157.50 and it’s a different story, but for now, investors should remain a bit cautious with this market leader.
