Apple is expected to hold a special event to reveal the iPhone 15 family to the world on or around Tuesday, September 12th. Following that, the company is expected to release its fiscal Q4 earnings at the end of October. Currently, Apple stock is significantly oversold based on its Relative Strength Index (RSI).
Joshua M Brown for The Reformed Broker:
The Relative Strength Index or RSI is typically expressed as a 14-day reading to determine the degree to which a stock or an index is overbought or oversold, if at all… A good rule of thumb is to think about stocks with an RSI of 30 or under as being “oversold”, meaning traders have rapidly been pushing down the price rapidly and meaningfully with their sales. On the upside, a stock with an RSI of 70 or greater can be typically thought of as “overbought.” Stocks can remain oversold or overbought for a long time, so it’s not a magic formula for trading profits.
Today I want to look at the Relative Strength Index for Apple as the share price has fallen quite a bit recently – maybe too far, too fast.
Apple is the biggest stock in the world. It’s statistically oversold here, having gapped below its 50-day moving average after a good not great earnings report this summer. Pay particular attention to the bottom pane, which is 14-day RSI. You’ll note that buyers have been rewarded for stepping in each time the stock has been oversold to this degree over the last five years – oftentimes that reward has been immediate.
If you’re looking at the stock for a buying opportunity, what you’ll want to watch for now is a bullish swing rejection. Very simply – on Apple’s next bounce, RSI should break back above 30 into “positive territory. That’s step one. Step two is to observe during the stock’s next pullback. If RSI can dip but remain above 30 (not get more oversold), it tells you the sellers in the stock have largely been cleaned up and bulls are back in control…
It’s not only the biggest stock in the world, it’s also the best company in the world, maybe of all time. You’ve got a moment here where sales growth is slipping and the stock is as oversold as its been in years. The best case scenario for buyers of the stock today is that sales reaccelerate and the new phone is an instant, apparent hit.
MacDailyNews Take: Patience, Padawns. The best is yet to come.
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