Apple ‘death cross’ looms

“One bearish chart for Apple Inc.’s stock doesn’t a bear market make… but how about four scary-looking charts?” Tomi Kilgore reports for MarketWatch.

“First is an impending bearish ‘death cross’ pattern, in which the 50-day moving average crosses below the 200-day moving average. This pattern is seen by many as marking the spot that a shorter-term decline graduates into a longer-term downtrend,” Kilgore reports. “While the validity of the ‘death cross’ has been widely debated, the last time one appeared, just as the stock was pulling back from record highs, the stock fell another 27% in four months.”

“Based on the current trajectories of Apple’s 50-day and 200-day moving averages, a ‘death cross’ should be confirmed in a little over a week, or at least by the end of the mont,” Kilgore reports. “Adam Sarhan, CEO of financial advisory firm Sarhan Capital, said he turned bearish on Apple’s stock earlier this month, after being bullish for about 1 1/2 years, because it broke below key support, including the 200-day moving average. ‘When you see a major break in a stock like Apple, that means the big institutions are selling, not buying the stock,’ Sarhan said in a phone interview with MarketWatch. ‘We saw this in 2012.'”

More AAPL chart soothsaying here.

MacDailyNews Take: Heartening.

[Thanks to MacDailyNews Reader “eldernorm” for the heads up.]

27 Comments

    1. “Heartening” – and unfortunately true – I’ve been a long time Apple bull and shareholder – but have been selling stock lately because record quarters and earning do not seem to matter anymore with this stock – and regardless of my love for the products, I need for my investments to grow – I’ve never seen a stock get so penalized and punished for every little issue and not rewarded for stellar performances quarter after quarter.

      1. You are a smart investor. Rather than bitch and moan and complain about AAPL being treated so unfairly on Wall Street, you simply sold it and made a profit. And that’s what it’s all about.That doesn’t stop you from being a fan and consumer of all great things that Apple produces. But it does keep you out of the camp of chronic bitching clueless investors. Kudos to you.

  1. From the article:
    ‘death cross’ pattern, in which the 50-day moving average crosses below the 200-day moving average.

    Technically it should read:
    ‘death cross’ pattern, in which the 50-day moving average crosses below the 200-day moving average where the 50-day and the 200-day averages are both going lower at the same time.

    Not that it matters in this case because both appear to be headed lower at the same time.

    1. Some good news – Maybe! 🙂

      It is interesting to note that the bearish “death cross” occurred before Apple initiated its buyback program. The upturn and the bullish “golden cross” occurred in the second half of 2013 which corresponds to a $21 Billion buyback of stock that occurred in the same second half of 2013. The stock really took off in 2014 when Apple bought back $47 Billion worth of stock.

      How much can the current buyback program deter the 27% decrease that occurred before, I don’t know but it should have some positive effect on the stock price. We shall see.

      Buyback spreadsheet:
      http://appleinsider.com/articles/14/10/21/apple-inc-surprises-with-massive-17-billion-q4-stock-buyback

      Graph in the article:
      http://www.marketwatch.com/story/a-death-cross-in-apples-stock-is-coming-2015-08-19

    2. If anyone is stupid enough to believe in technical analysis, and base their investment decisions on it, I pity them. It’s voodoo.

      Death crosses and teacup handles. Yes, because that’s SO logical and such a brilliant way to separate yourself from your retirement money. May God have mercy on us all.

  2. I have been keeping a not inconsiderable amount of cash on hand in the hopes of a large drop in Apple share price. I would love to get a bargain a 20% drop in price would represent.

  3. More evidence that Wall Street runs far more on emotion, relying far more on sooth sayer level predictions than any kind of real world analysis of financial fundamentals. Bizarre that a very few can play the FUD of the majority and milk them of their money so consistently. Even more bizarre that this is legal.

    But then again, political campaigns seem to also ran far more on FUD than on any kind of logical selection of the best candidates. And, arguably, the same players who manipulate Wall Street are also manipulating our elections using similar FUD manipulating tools tied to the media.

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