Apple stock broke key support and is continuing to struggle. Here are the must-know levels going forward.
Apple (AAPL) – Get Free Report stock fell 4.7% on Thursday, outpacing the declines we saw in both the Nasdaq and the S&P 500. Only Netflix (NFLX) – Get Free Report declined more than Apple yesterday when referencing the FAANG stocks.
That’s true even if we include Microsoft (MSFT) – Get Free Report and Tesla (TSLA) – Get Free Report, too.
For most of the year, Apple has been the unsinkable ship for mega-cap tech stocks. All others have spent time under severe selling pressure, but not Apple.
Still commanding a market cap in excess of $2 trillion, the largest peak-to-trough decline Apple stock has suffered this year was 29.5%. For reference, the Nasdaq suffered a peak-to-trough decline of 37.8%.
Now though, Apple stock continues to get hit.
Whether it’s concerns about China’s economy, iPhone production, slowing growth, its App Store business in Europe or just simply a global recession, Apple shares are finally feeling some heat.
Apple Stock Breaks Key Support
Daily chart of Apple stock.
Chart courtesy of TrendSpider.com
Apple fell more than 4% on Thursday, marking its worst one-day decline since Sept. 29. Worse though, the stock broke below key support in the $140 to $141 zone.
That area has been drawing in buyers for more than a month, as Apple has continued to bounce from this zone.
While it would dance around its 10-day, 21-day and 50-day moving averages, it had trouble gaining traction over $150, while at the same time, downtrend resistance continued to draw out the sellers (blue line).
Now breaking below key support, it thrusts the fourth-quarter lows into play in the $134 to $135 zone.
Should this area hold, a bounce back to the $140 to $141 zone and the declining 10-day moving average could be in the cards.
If this area is resistance, then the $134 to $135 zone remains vulnerable. If it’s reclaimed, downtrend resistance is back in play.
So what happens if $134 to $135 fails as support? In that scenario, Apple stock could trade down to its year-to-date low near $129.
In the event that shares completely break down and the selling becomes overwhelming, it’s possible we see the $113 to $118 zone.
