Apple sell-off could bring buying opportunity

The Apple sell-off has seen $410 billion wiped off the value of the company, yet with the price showing tentative signs of a potential recovery, could this be the time to buy?

Apple conference Source: Bloomberg

Apple has been one of the biggest stories of this recent market sell-off, with the tech giant falling around 40% from its peak and shedding a whopping $410 billion in value from the peak of $1.138 trillion.

Much of this is obviously arising from the US-China trade breakdown, which has doubled down the selling pressure on a stock which has already suffered at the hands of a wider market sell-off. The recent deterioration in the Apple share price comes after the firm produced a warning that a decline in sales will have a negative impact on revenues. With the firm announcing that revenues are likely to come in around 5% lower than last year ($84 billion), the 40% decline in the company’s share price could be construed as overdone. However, this is also a reflection of future expectations, with the breakdown in trade relations between the US and China likely to continue hurting the firm until we see a resolution.

Given the fact that both sides are in trade negotiations this week, many will be looking for targets to invest in for a likely ultimate recovery. Interestingly, the Apple chart is trading at a hugely notable level of support, with the price having dropped into the 61.8% retracement of the 2016-2018 rally. This is also accompanied by the 200-week simple moving average (SMA). With that in mind, it is worthwhile watching to see if there is any form of base built around this area as buyers finally start stepping in. We are starting to see the stochastic turn higher for the first time in the midst of this sell-off, pointing towards a potential bullish turnaround in momentum. Much will be down to how these US-Chinese talks progress, yet should we see the stochastic rise back through the 20 mark, we could see a bullish signal that was last seen at the start of that 2016 surge.

Apple weekly chart

Apple weekly chart

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