Dow Jones tech titan Apple sold off Wednesday, threatening to break below a key benchmark. Is it time to sell Apple stock?
Early Wednesday, UBS hiked its price target on Apple stock, raising it from 190 to 236. That's a 24% increase and a 6% premium to Tuesday's closing price at 222.77. But UBS analyst David Vogt maintained a neutral rating on the stock.
"We estimate App Store revenue in the U.S. during August was about 100 bps (basis points) better than July," Vogt wrote in the report. "However, roughly two-thirds of App Store revenue is generated outside the U.S."
Adjusting for foreign currency effects, that suggests that there is no upside in Apple Services in the September quarter, Vogt says.
Meanwhile, Apple plans to unveil its iPhone 16 handsets at a product launch event on Monday. That could be a catalyst for further downside or a rebound for the Magnificent Seven stock.
The iPhone 16 series will be Apple's 18th-generation smartphone family but its first to come integrated with Apple's flavor of artificial intelligence, branded Apple Intelligence. Apple AI will use both on-device and data-center processing with a focus on privacy and security.
Forget Dow Jones Stock Amazon And Tesla. This Non-Magnificent Seven Stock Dwarfs Their Gains.
Apple Stock: Dow Jones Titan Breaks Key Level
Apple stock fell below the all-important 50-day moving average Wednesday, as shares of the Dow Jones component fell 1.5% midday. A close below the line would be a sell signal for those who bought the stock recently. Investors with a lower cost basis could decide to be more patient and wait for further weakness before making a decision.
Despite today's bearish action, Apple stock is tracing a cup base that has an official buy point at 237.23. The current setback could also set up a handle entry at 232.92 if the stock is able to halt its slide and turn higher.
Looking ahead, a decisive retake of the 50-day line would be bullish for the stock's immediate prospects.
In August, Apple stock rebounded strongly following the stock market sell-off in early August. That resulted in a strong relative strength line, a sign of big market outperformance. However, amid today's sell-off, the RS line is back at its lowest level since early July — another bearish sign.
