Right before the quarterly financial results, technical analysis suggests, Apple’s shares may fall further


Apple may continue be the preferred choice for the elite consumer, yet on the stock markets front, analysts are of the view that the brand is going to face a tough time just before its financial results are set to be released on 25th October, 2012.

These stock market experts take their cues from technical analysis of the organization. Here these experts assess the sales figures, brand recognition, earnings per share or such other basic information and draw a picture for a firm depicting its trade in the capital market for days to come. In case of Apple Inc. experts have created a canvas that’s bearish.

Going by the charts, they suggest that Apple’s ticker may continue to be in red for some time after going through the recent downward corrections and short calls in the stock are running at their two year highest.

However, the bad news doesn’t just end up there but further extends to other gadget makers in the industry along with maker of legendary products like iPhone, iPod, iPad etc.

The market may follow Apple’s development for a short term.  In case of Apple’s performance in respect of its 20-day correlation with S&P 500 index, it has achieved the approximate perfect synchrony with the index at 0.98 in January and has touched the negative levels only seldom. Now it is trending near the 0.8 levels.

Rick Meckler of LibertyView Capital Management based in New Jersey said, “When (Apple) was on its meteoric rise, its size helped carry S&P indexes materially higher and now it’s been a headwind for the market,”

Ryan Detrick of  Schaeffer’s Investment Research in Cincinnati says, “Apple is near-term oversold but bigger-picture things don’t look good from a purely technical backdrop,” and “I’d advise being very careful if you are long this one.”

Apple stock have though gained an appreciation of about 50 percent in this year but it’s still trending at 10 percent below than the highs of $702.10 it has hit in this year. However, before the release of its quarterly financial results on Thursday, some technical indicators are pointing towards further downplay in the stock.

Source: Economic Times

Photos:Apple, Guardian, Smashing Hub

 

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