Apple’s break beneath a key technical and psychological level could signal more selling ahead for the stock — and for the broader market.
Asbury Research’s chief market strategist, John Kosar, said Apple’s close below the $92 level could mean there’s roughly another $8 that could come off the share price. That could impact the S&P 500 and the Nasdaq 100, both highly correlated to the tech giant.”Little levels get little reactions, and big levels get big reactions,” he said. “You break a level like $92 that everybody can see … more reaction in the marketplace. More people are aware of it and are acting on it.”
Apple closed Thursday at $90.32, down 2.4 percent. The $92 level is the Aug. 24, 2015, low. Kosar said the shares tested that level again when the stock market troughed on Feb. 11.
“If it closes below here, it’s bearish. It’s probably going to go lower … when you break a support level, it usually begets more selling,” he said. Kosar said the next downside level to watch is $84.77, which is the March 2009 uptrend, then watch $82.19, its December 2013 benchmark high.“Apple is sending a negative signal, and you’re getting more people to articulate it’s a company that’s one bad product away from a disaster,” said Art Cashin, UBS director of floor operations at the NYSE.
Thursday’s sell-off came amid concerns about iPhone sales and the upcoming iPhone 7. Stocks turned lower Thursday morning as Apple sold off. The Nasdaq was the first of the major indexes to turn negative.“It’s statistically correlated to those indexes,” said Kosar of the Nasdaq 100 and S&P. “If Apple drops another 6 to 9 percent, the correlation is likely to have an adverse affect on the broader market.”
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