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Is Apple about to slide further as iPhone demand falters?

on Sep 28, 2022
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  • Apple stock lost nearly 4% on Wednesday.
  • The stock suffered at the back of reports Apple was scaling down iPhone production.
  • There are further downside risks for Apple, but the stock could regain strengths.

Apple Inc. (NASDAQ:AAPL) was trading at $146 on Wednesday, losing 3.58% on the day. The decline followed reports that Apple was calling off plans to hike iPhone production in the year. The news indicated that the decision followed faltering demand for the flagship product. Concerns are mounting in the global market.

Recession fears, high inflation, and disruptions from the Ukraine war have dampened global stock markets. The demand for electronics has been affected globally. Market tracker IDC projects 6.5% lower smartphone sales this year.

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The latest iPhone production report cemented fears that recession is finally catching up with Apple. However, Tom Forte, an analyst with D.A Davidson, is defensive of Apple. In a CNBC interview, Forte says the stock is compelling amid the challenges. He expects the product portfolio and core consumers to continue driving growth.

Apple stock crashes below the 20-day MA

Source – TradingView

Technically, bears are in control as Apple broke below the 20-day moving average. A bearish MACD crossover occurred as the sell-off accelerated on the negative report. The stock has yet to find support, established at $138. 

If the bear market continues, Apple bulls will try to defend the $138 support. That indicates a further 5.5% drop from the current level. $138 will be significant as Apple has defended the level since July 2021.

When to buy Apple

Apple could maintain the downtrend as recession fears grow. However, it remains a defensive holding for investors looking for value stocks. The stock could initiate a bullish reversal at the $138 support zone.

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