Apple Stock Price Set To Fall

Apple Inc (AAPL) is involved in the design, manufacture and marketing of mobile communication and media devices, personal computers and portable digital music players. It is listed on the NASDAQ with a market capitalisation of around $600 billion. Price last traded at $108.66.

Let’s take a top down approach beginning with the quarterly chart.

AAPL QUARTERLY CHART

We can see an outstanding bull market in play with the recent move down looking like a correction only within the greater scheme of things. I believe this correction is still playing out with the final low still ahead of us. Why? The following analysis should help explain that.

The Bollinger Bands show the recent low was bang on support from the middle band. While that may be the final low, I favour price doing some more work around this middle band to really test its support. This would see price dip marginally below the band before the buyers pile back in.

The RSI showed a triple bearish divergence at the all time high set in 2015. This often leads to a significant decline and that has already been the case with price dropping just over 30% from the top. However, considering this is the big picture quarterly chart I favour some more damage to the stock price can still be done.

The MACD indicator is bearish with the averages still trending down and buying the top of the rally with this indicator in the current position is not for the faint hearted.

I have drawn a Fibonacci Fan from the 2009 low to 2012 high which has shown some nice symmetry with price. The 2013 low was just above support from the 61.8% angle while the 2015 high was right at resistance from the 23.6% angle. Price has recent found support at the 50% angle however I favour price breaking to new lows and the 61.8% angle is my target to provide solid support for price once again.

I have added Fibonacci retracement levels of the move up from 2009 low to 2015 high and I am looking for the final low to be around support from the 38.2% level which stands at $87.41. Price turning back up here would still keep the overall bull trend in a very solid position.