Apple stock might just fall into its own bear market. Investors should pay attention to some key levels — to see if the recent selloff will get worse.
Shares of the iPhone maker are down 0.2% in early trading at $222.13, while the S&P 500 and Dow Jones Industrial Average were up about 0.5% and 0.2%, respectively.
The early drop left Apple stock down about 15% from its 52-week intraday high of $260.10 reached on Dec. 26. Declines left Apple with a market value of about $3.3 trillion, trailing Nvidia’s $3.6 trillion. Microsoft, the other company with a $3 trillion-plus value, checks in at just under $3.3 trillion. “Breathing down [Apple’s] neck,” as ChartSmarter founder and market technician Douglas Busch put it in a Wednesday report.
Apple stock is looking “rotten” he added, pointing out that, through early trading, shares had given up all of their post-presidental election bounce. The S&P 500 remained up about 5% since the election. The Technology Select Sector SPDR exchange-traded fund remained up about 6%.
“There is increased risk that the nearby 200-day moving average ($217) will be taken out,” wrote Fairlead Strategies founder and market technician Katie Stockton in a Wednesday report. If it gets through that level, investors would be looking at support of about $208.
That would leave shares down about 20% from recent highs — in its own bear market. Individual stocks don’t really have bull and bear markets, and are always more volatile than the market as a whole. Still, investors don’t like to see a drop of 20 points.
Support is a term used by technical analysts that describes where investors have stepped in and bought shares in the past. The opposite of support is resistance, a level where investors tend to take profits.
Technical analysts aren’t making fundamental calls on shares. They are looking at chart patterns to get a sense of investor sentiment. They are always looking for when stocks, such as Apple, break through resistance or fall below key support.
Right now, Apple stock is looking weak. A few things seem to be troubling investors. For starters, shares got expensive. In December, shares were trading for about 34 times earnings expected over the next 12 months, up from about 29 times a year ago. Recent declines have brought the multiple back to about 29 times.
The S&P 500 trades for closer to 22 times.
J.P. Morgan analyst Samik Chatterjee wrote recently that investors are a little nervous about the outlook for 2025. Apple has lost some market share in China and has had limited traction with its AI offerings. Even a strong dollar is hurting. Apple sells a lot of things overseas.
That’s the fundamental backdrop. The technical picture shows investors what can happen if investors continue to see a deterioration in the company’s business.
Chatterjee rates Apple stock at Buy and has a $260 price target. But he cut that by $5 earlier in January. Overall, Apple shares remain relatively popular on the Street with 63% of analysts covering them with Buy ratings. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
The average analyst price target for Apple stock is about $248.