Apple’s stock is down more than 20 percent off of recent high prices, falling from up over $134 per share to a bit more than $106 per share. There are a lot of reasons for this plummet, and some of them are better than others. There are two questions that traders should be asking themselves right now about Apple: what will the price be doing in the future? And, when will that start?
To get an answer to either of these questions, we need to look at the recent past a little bit. One big issue, perhaps the biggest, is that there is a lot of data out there saying that there is less demand for smartphones, particularly iPhones. This is one of Apple’s biggest selling products, and a vast majority of its profits come from iPhone sales. With less demand, it only makes sense that future profits will decline. There have also been allegations against Apple about tax evasion, although these rumors currently seem to be unfounded. Still, this is an unsettling bit of news and it’s easy to see how it could have a negative impact on stock price if it were true.
Also, remember that Apple is one of the biggest stocks that individual investors hold. Many companies, if you look at them, will have institutional investor numbers of 90 percent or higher. Apple’s rate sits at 59 percent. This makes it much more susceptible to whims of the public. As a whole, the general public is far less educated about stocks and long term outlooks than professional money managers, and this means that a change in public perception will hurt Apple more than a stock that has a higher percentage of banks and funds owning it.
Apple is still a strong company. They have a strong line of products and a history of success. It’s very likely that the company will turn around in 2016, although that’s a very vague timeframe for binary options traders that are looking at things minute by minute, instead of over the course of the year. For now, public perception is against Apple. Unless a point of support is hit soon, Apple’s free fall could continue for a bit still. And this is in spite of the fact that the amount of money that they’ve lost recently is more than the majority of the entire worth of most of the individual companies in the S&P 500.
Because of their history and the ingenuity of their products, Apple is a company that is currently selling at a discount, and that means long term investors should be buying shares, especially if prices continue to drop. This is not a drop that will happen for forever, and that right away is a signal to binary options and other short term traders to tread lightly here. The problem is, although a reversal is probable in the future, there’s no clear way of knowing when that will happen. The stock is currently trading at below both the 20 day and the 100 day moving average, and that could be an indicator of a price reversal, although in light of the bad news plaguing the company, this is not really going to be a timely one. For now, Apple’s price is unstable, and the minute by minute indicators will prevail in your trading. As you proceed, just keep an eye on what the experts and analysts are saying about Apple so you can get a feel for sentiment. Also be aware of the news, and Apple is well known for using press conferences to their advantage.