Will Apple Stock Boost the Market or Sink It Again?

Apple stock on July 18 dealt a knockout punch to the stock market. It’s holding support for now but is still struggling with resistance.

The stock market opened higher and rallied on Monday, but it lost momentum in the afternoon. While Apple  (AAPL) – Get Apple Inc. Report is usually helping the market’s cause, it sabotaged it yesterday.

In midday trading Monday, a report surfaced that Apple would slow its hiring and spending in some of its teams next year. 

The fact that the S&P 500 and Nasdaq reversed lower and shifted into a selling mentality for the rest of the day shows just how fragile the market is right now.

Apple’s spending and hiring plans aren’t necessarily a big deal. But if the reports pan out, it’s the latest company — particularly in mega-cap tech — to pull in the reins when it comes to spending.

Apple would join Alphabet  (GOOGL) – Get Alphabet Inc. Report  (GOOGL) – Get Alphabet Inc. Report and Meta  (META) – Get Meta Platforms Inc. Report in the companies’ more conservative view when it comes to the economy’s short-term standing. Netflix  (NFLX) – Get Netflix Inc. Report is tightening its spending, too, and we’ll find out more tonight when it reports earnings.

If a majority of FAANG feels this way, it’s reasonable that investors should as well. Hence yesterday’s pullback.

With stocks again rallying on Tuesday, though, the bulls are wondering whether Apple stock can help lead the charge higher or if it will once again act as an anchor.

Trading Apple Stock

Daily chart of Apple stock.

Chart courtesy of TrendSpider.com

While we’ll hear from Netflix tonight, we won’t hear from Apple until July 28.

In the first quarter, Apple stock dipped down to $150, made a low and bounced hard. A few months later in May, it knifed through this level and the figure became resistance in June.

Now Apple is trying to push through the $150 level and the June high at $151.74. That’s the area that rejected the stock yesterday, even though a news item was what accelerated the selling pressure.

For now, the 10-day and 10-week moving averages are acting as support this week. If that remains the case, then the $150 to $152 area remains in play.

If Apple can clear this resistance zone, it will open the door to the 21-week moving average and 50% retracement near $154. Above that and the 200-day moving average and 61.8% retracement near $160 are in play.

On the downside, a break of the 10-day and 10-week moving averages puts the $142 to $143 area in play. Below that and $137 is in play, followed by a small gap-fill at $133.

For now, the bottom line is pretty simple: Apple is again struggling with resistance but is so far putting in an inside day. In other words, both support and resistance are still in play and we must wait to see which one breaks next.

On the upside, $150 to $152 is the area to watch, while $146 to $146.50 is the zone to watch on the downside. 

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