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Apple stock suffers first 'death cross' chart pattern since the pandemic – MarketWatch

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Apple Inc.’s stock has fallen far enough and for long enough to produce a certain ominous-sounding bearish chart pattern should didn’t appear during the short COVID-19-induced bear-market selloff of early 2020.
The technology behemoth’s stock AAPL, -3.86% rallied 1.7% Thursday to close at $151.21. It has bounced 10.1% since closing at a 10-month low of $137.35 on May 19, which was 24.5% below the Jan. 3, 2022 record close of $182.01.
Despite the recent bounce, the stock has fallen far enough and for long enough for the 50-day moving average (DMA), which many chart watchers view as a short-term trend tracker, to cross below its 200-day moving average (DMA), which is viewed as a dividing line between longer-term uptrends and downtrends, on Friday.
That crossover, which is referred to as a “death cross,” is seen by some technicians as marking the spot that a shorter-term selloff graduates to a longer-term downtrend.
Apple’s 50-DMA is set to open Friday at $159.206, down from $159.586 on Thursday, according to FactSet data, while the 200-DMA inched up to $159.516 from $159.492.
The “death cross” has appeared just in time for Apple’s Worldwide Developers Conference, which is scheduled for June 6 to June 10.
The stock has been weighed down by concerns over how supply chain challenges and COVID-19-related lockdowns in China could hurt Apple’s earnings, and as rising interest rates have led to reduced valuations of high-growth stocks.
History suggests death crosses aren’t necessarily good market timing tools, as they are well telegraphed, but they can be useful in putting a stock’s recent performance in perspective.
Also read: Why the Tesla ‘death cross’ shouldn’t scare off investors.
In early 2020, the stock sank as much as 31.4% from the then-record close of $81.80 on Feb. 12 to the five-month low of $56.09 on March 23, as the COVID-19 pandemic fueled fear that lockdowns would cripple the economy.
The stock may have fallen far enough, but not quiet long enough, as the closest the 50-DMA got to the 200-DMA was $2.473, or 3.7% above it, on May 18, 2020.
During the early-2021 correction, the stock fell 18.7% to the March 8 closing low of $116.36 from the then-record close of $143.16 on Jan. 26. That wasn’t significant enough to produce a death cross either, as the closest the moving averages got was $3.758, or 3.0%, on May 27.
Apple’s last death cross appeared on Dec. 20, 2018, after the stock had tumbled 32.4% from a then-record $58.02 on Oct. 3, 2018. The stock fell another 9.3% before bottoming on Jan. 3, 2019 at a 21-month low of $35.55, which was 38.7% below its record.
The one before that appeared on Aug. 26, 2015, with the stock down 17.5% from its previous record close of $33.25 on Feb. 23, 2015. The stock didn’t bottom until it fell another 17.7% to a near two-year low of $22.58 on May 12, 2016.
Among Apple’s high-tech and mega-capitalization peers, Microsoft Corp.’s stock MSFT, -1.66% produced a death cross on March 15 and has declined 4.4% since then through Thursday, Alphabet Inc. shares GOOGL, -2.62% GOOG, -2.70% have fallen 11.8% since their death cross appeared on March 9 and Amazon.com Inc.’s stock AMZN, -2.52% has slumped another 10.3% since producing a death cross on Jan. 25.
Meanwhile, the Dow Jones Industrial Average DJIA, -1.05% produced a death cross on March 8 and has gained up 1.9% since, while that pattern appeared in the Nasdaq Composite Index’s COMP, -2.47% chart on Feb. 18 and the tech-friendly index has lost 9.1% since.
Read more: Opinion: The Dow, S&P 500 and Nasdaq have now suffered a ‘death cross’ — here’s why this could resurrect them.
Dave Clark, who has spearheaded Amazon.com Inc.'s world-wide consumer business since the start of 2021, is resigning.
Tomi Kilgore is MarketWatch’s deputy investing and corporate news editor and is based in New York. You can follow him on Twitter @TomiKilgore.
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She has been writing columns on consumer gadgets for over 2 years now. Her areas of interest include smartphones, tablets, mobile operating systems and apps. She holds an M.C.S. degree from Texas A&M University.