Believe it or not, it may take more than a major sales warning from Apple CEO Tim Cook to send the tech giant’s stock below the psychologically important $100 level.
Or so says one Wall Street expert. Oppenheimer Chief Technical Analyst Ari Wald tells Yahoo Finance that a biting, global recession would need to happen for Apple to make the plunge below $100 a share. While Wald accurately notes that Apple’s stock is below the critical 200-day moving average — never a good place for a stock to be — he thinks there could be support on the charts in the not too distant future.
“Apple’s stock has retraced 62% of its prior advance and is coming into $135 support marking its 2015 peak,” Wald writes. “While the stock’s 37% peak-to-trough decline is on par with drops of 45% and 33% in 2013 and 2016, respectively, those prior declines developed over seven and 13 months versus four months currently. This leads us to believe that Apple needs several months to form a base before a bullish reversal can be attempted.”
Apple investors will be anxiously awaiting to see if support on the charts forms in light of what Wedbush analyst Dan Ives tells Yahoo Finance is one of “Apple’s darkest days.” The argument could be made that with many on Wall Street slashing profit estimates on Apple for the next 12-months by more than $1.00 and forthcoming guidance on earnings day likely to be weak, Apple’s stock is destined to break below $100.
Apple said in a filing released after market close Wednesday that it now sees first quarter revenue of about $84 billion. It previously anticipated $89 billion to $91 billion. In the filing, Cook attributed the reduced guidance to weakness in emerging markets and in Greater China as well as supply constraints on new products. Cook also hinted strongly that Apple felt resistance from consumers to the new $1,000-plus iPhone XS line.
Although Cook tried to hype strong demand in AirPods and Apple Watches, investors weren’t buying it.
Trading was halted Wednesday for Apple shares at about 4:25 p.m. ET in advance of the release of the announcement. The stock declined 8.49% to $144.51 per share when trading resumed 25 minutes later, hitting the lowest level since July 2017.
Shares dropped about 8.5% in midday trading on Thursday.
Emily McCormick contributed to this story
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
Read Yahoo Finance’s Apple coverage: