Why Is Apple (AAPL) Stock Down? Can Buyers Defend the $309 Support Next Week?
Apple (AAPL) tests key $309 support after a $300B post-earnings selloff. Can buyers rebound next week? Key levels and outlook.
Quick overview
- Apple's stock fell over 7% after fiscal Q3 earnings, erasing more than $300 billion in market value despite record revenue of $109.4 billion.
- Concerns over supply constraints and weaker-than-expected Services growth led to a sell-off, prompting investors to reassess Apple's near-term growth prospects.
- Key support for Apple is at $309.41, with potential targets of $320.27 and $328.31 if it rebounds, while a drop below $309 could lead to further declines.
- Upcoming U.S. economic data will influence investor sentiment, particularly regarding the labor market and its impact on Federal Reserve policies.
Quick Answer: Apple (NASDAQ: AAPL) lost more than 7% after the fiscal Q3 earnings print and headed into the new week under even more pressure. While record June-quarter revenue of $109.4 billion and EPS of $2.02 were positive prints, investors were concerned with post-earnings supply and Services growth constraints, and weak guidance for the September quarter. Apple’s post earnings decline was the sharpest in recent memory and erased more than $300 billion in market value. Investors were reassessing post-earnings prints for Apple’s near-term growth.
August started for Apple with a sell-off, and the goal was to remain above the critical $309 support level. Earnings confirmed for many the continuing dominance of Apple’s ecosystem. However, Apple earnings results gave Wall Street supply-chain constraints and the post-earnings growth ceiling for Apple relating to AI-driven incremental upgrades.
Week in Review: Strong Results Could Not Stop the Selloff
Apple delivered record results for the June quarter, with revenue growing 16% to $109.4 billion and diluted EPS increasing 29% to $2.02.
Annual growth for the June quarter FY23 also showed growth across almost all divisions. iPhone revenue grew to $54.3 billion with growth of 22%. Growth for the Mac rose to $10.4 billion with growth of $10.4 billion. Apple also reported record Services revenue of $30.7 billion and an installed base of over 2.5 billion devices with paid subscriptions exceeding 1.5 billion.
Apple had also provided a return of almost $33 billion to shareholders via dividends and share buybacks. Cash and marketable securities remained almost at $147 billion.
However, investors were looking beyond the quarter.
Services revenue was a little below Wall Street expectations, and management warned supply constraints on the iPhone, Mac, and iPad would worsen during the September quarter. Gross margin guidance was lowered to 47%-48% from 50.1% in the June quarter, partially due to diminishing tariff-related benefits.
These factors led to widespread profit-taking after Apple shares had reached record highs ahead of the earnings report.
Week Ahead: Macro Data Becomes More Dominant
With earnings now completed, Apple will not have scheduled events pertaining to the company for the upcoming week.
Instead, the U.S. economic calendar will occupy investor attention.
The following data will be provided:
- Monday: ISM Manufacturing PMI
- Tuesday: JOLTS Job Openings and Factory Orders
- Wednesday: ADP Employment and ISM Services PMI
- Thursday: Jobless Claims and Productivity
- Friday: Non-Farm Payrolls, the Unemployment Rate, and Average Hourly Earnings
If the labor market is reported weaker, investors will likely sell in line with big tech, Apple included, expecting the Federal Reserve to cut rates. In contrast, stronger employment data would likely raise Treasury yields and the U.S. dollar and sell more in line with the previous week.
The market will also try to digest the value of Apple’s management change with Tim Cook moving to the Executive Chairman role as John Ternus steps in as CEO on September 1.
Apple Technical Analysis: $ 309 Support Will Set the Direction for Next Week
Apple will begin the week at the most important technical level. The sell-off in share price after earnings erased July breakout price actions and moved Apple toward the 50% Fibonacci retracement, with buyers stepping in at the $ 309.41 level to defend that support. The sell-off hurt support and short-term momentum, but Apple is still trading well above the average 100-day line and has a positive slope at ~$ 279, indicating the long-term trend is positive.
Bearish momentum has increased and the RSI is around 43, indicating a defense of $ 309.41 could push price actions toward $ 320.27, and subsequently, $ 328.31. However, consistently closing below $309 could lead to a decline to $300.94, with further targets of $288.96 which is the 78.6% Fibonacci retracement which is a stronger level of support.
Resistance: $320.27, $328.31, $344.64
Support: $309.41, $300.94, $288.96
Trade Setup
Entry: Buy above $320.27
Targets: $328.31, then $344.64
Stop Loss: Below $309.41
Although the long-term trend remains intact, a loss of $320 would halt momentum for the bulls and a loss of $309 would likely see targets lower into next week.
Frequently Asked Questions
Why did Apple stock fall despite beating earnings?
Although Apple reported record revenue and earnings, the market focused more September-quarter guidance and a softer-than-expected Services performance and an overall increase in supply constraints. It has been reported that these issues were of more concern than the earnings beat.
What will move Apple stock next week?
All eyes will be on the economic data that the U.S. will release, with the main focus being the Non-Farm Payrolls data that will be released on Friday. These data will impact the Fed, Treasury yields and the appetite for risk in large-cap tech.
What are the key Apple price levels to watch?
Key support sits at $309.41. Rebounding from this level would target $320.27 and $328.31. Breaking below $309 would target $300.94 and $288.96.
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