Apple is forming an early-stage base with a buy point of 237.23, according to IBD MarketSurge. That is usually the hallmark of a healthy chart. But a closer look at Apple stock's recent price action shows several bearish signs that investors should heed before buying shares.
Apple has been falling amid recent news. On Monday, the stock gapped down below the 50-day moving average after reports that demand for the new iPhone 16 was lagging the iPhone 15's at this time last year. The newest version also comes without the long-awaited Apple Intelligence, though a limited launch will be made through a software update in October.
Apple Stock Hits Resistance
AAPL shares hit resistance at the 50-day moving average ahead of the iPhone 16 event on Sept. 9. Apple stock has spent most of the past two weeks below that important level.
The relative strength line, which tracks the stock's performance vs. the S&P 500, has been falling almost vertically since the iPhone 16 introduction.
Other metrics are worrisome for Apple stock, as well. The Relative Strength Rating is just 70. Investor's Business Daily recommends a rating of 80 and above. When a stock's rating drops below 70, it could be considered a sell signal if there are other bearish signs in the chart. That's arguably the case with Apple.
June-quarter results released on Aug. 1 did little to help the stock. Sales grew 5% and reversed a 4% decline in the prior quarter. Earnings growth accelerated with an 11% increase that followed a 1% rise in the previous quarter.
Shares sold off and sliced below the 50-day line on Aug. 5 after reports said seasoned investor Warren Buffett had cut Berkshire Hathaway's stake in the Dow Jones leader by nearly half.
Institutional support for Apple stock is fading. The stock holds an Accumulation/Distribution Rating of D-.
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