The writing may not be on the wall, but it may be on the iPad for Apple (NASDAQ:AAPL) investors. Let’s look at what’s happening in today’s market, off and on the price chart, then offer a risk-adjusted determination on positioning in AAPL stock.
Apple. It’s a name rarely associated with relative weakness and underperforming the Nasdaq 100. The stock does constitute a full 13% of the tech-heavy index. And it didn’t become the world’s largest company and first enterprise to be worth more than $2 trillion without bearing regular fruit for investors, right?
But since clawing its way out of September’s broad-based correction, shares of AAPL have been less sweet by Wall Street.
At its best, the Nasdaq retraced more than 76% of last month’s aggressive selloff. And right now the index is wedged between its 50% and 62% retracement levels. Comparatively, Apple’s rally was sent packing against its 62% Fibonacci resistance level. Now it’s stationed about 3% beneath the midfield line. Shares are also a full 6% beneath late August’s ballyhooed pre-split price. Net, net it’s not rocket science to realize the company’s shareholders have been on the defensive.
So, what gives? There’s likely a couple key drags working against Apple. A heavily drum rolled unveiling of Apple’s latest mobile device, a 5G iPhone 12, hasn’t moved the needle for a company. What’s more, in front of its next quarterly report AAPL stock is historically and in absolute terms, as pricey as its products. All eyes and cameras will be watching Apple a week from today to learn if its 30x forward price multiple is at increased risk of contraction.
There is also the Presidential election and its potential impact on Apple’s business.
Biden has continued to lead in national polls by nearly 10 points. That’s good for Apple. As CNBC’s James Cramer has noted, a new administration reopening a relationship with China should help Apple, as well as consumer brands…