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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Apple stock: is now the time to buy?

Even though September is often when Apple shines, things are a bit different this year.

Source: Bloomberg

Apple’s new strategy

September 7th, 2022 saw Apple Inc unveils its 2022 lineup of smartphones and digital assets. The launch includes a base model iPhone 14, a larger Plus version, the 14 Pro, and the 14 Pro Max.

The gap between the base and the Pro model is apparent with the Pro models receiving a 48-megapixel camera upgrade compared to the 12-megapixel, a much faster A16 Bionic chip, and a new always-on-display feature. The 35% price increase for the Pro models and added improvments are all designed to fit into Apple's new strategy.

What does the new strategy mean for Apple?

This new strategy has the potential to be a game changer for Apple.

Over the previous years, the lower-priced iPhones usually did well in sales and this was evident during the second quarter of 2022 when Apple sold about 37% more of the base model iPhone 13 and 13 Mini than the two Pro versions.

But for the new series, the expectation is that the iPhone 14 Pro and iPhone 14 Pro Max will account for 50 to 60% of total shipments for the rest of the year with the iPhone 14 Pro Max, the most expensive version, anticipated to make up 30 to 35% of sales alone.

The evidance to this can be seen on Apple's website with the ‌iPhone 14 Pro‌ and ‌iPhone 14 Pro‌ Max already sold out and estimated to be shipped in weeks while the ‌iPhone 14‌ models are still in stock and available to order.

This new product strategy, along with the 35% price increase, will not only help Apple seize more market shares, an area where Samsung is leading, but more importantly, will help the company enjoy higher margins to combat the inflation headwinds.

Apple’s share price and technical analysis

Over 2022, Apple's share price has declined 18% and only a further 15% since August 18th.

However, despite a slightly questionable performance, it is still safe to say Apple remains a company investors can count on. Given its robust business and financial performance, the recent dip in prices doesn't change the fact that shareholders have received enviable returns over the last five years, at around 300%.

The share price for Apple has been working hard to stabilize the ground around the 100-day moving average after the recent decline to a two-month-low. That brings the price back to the crucial $150 level signalling the potential for further downside.

However, with the price dipping deep into the oversold territory, we could see the possibility that selling pressure should ease soon.

Even so, with an overall bearish sentiment in play, it may be too optimistic to expect a quick turnaround. A rise through the $154 level, where the 20-day MA sits, would be required to negate this bearish short-term view.

Apple daily chart

Source: IG

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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