Apple (AAPL) shares saw a 2.3% decline on Thursday, marking the largest one-day drop since late March. This shift occurred as investors moved away from high-performing large-cap tech stocks towards small caps, which may benefit more from anticipated rate cuts by the Federal Reserve. The decision to pivot came after a government inflation report revealed a surprising decrease in consumer prices for June, leading to expectations of an upcoming reduction in the Fed’s benchmark interest rate.
Despite the setback on Thursday, Apple shares continue to trend upward, maintaining a positive momentum this month after breaking out of a pennant pattern. The technical analysis shows that the stock remains in an uptrend, with the recent crossing of the 50-day moving average above the 200-day moving average signaling potential price increases.
Looking ahead, investors can use the measuring principle to project a potential price target for Apple shares. By applying the distance of the previous trend to the top trendline of the pennant pattern, a price target of $271 is forecasted. This technique provides a general area on the chart where the shares may trend if the price follows a similar pattern to the previous move higher.
During pullbacks, it is important to monitor key support levels on the chart. Potential areas of support include $220, $197, and $190, where buyers may step in to prevent further decline in the stock price. As of recent premarket trading on Friday, Apple shares were up 0.4% at $228.41.
In DailyBubble’s perspective, while the technical analysis points towards a positive outlook for Apple shares, it is crucial for investors to remain vigilant and monitor the support levels mentioned above. The market conditions and upcoming Fed decisions may continue to impact the stock’s performance in the coming weeks.