Apple Inc. detractors and bears can celebrate the first anniversary of “death cross” of the stock on Friday. This is the second time in the long 36-year history of the stock that the bearish chart pattern has prolonged for that much time, says a report from Market Watch. The bulls, however, should not be too fast to celebrate, even though the current bearish technical period is on track to end within two weeks, the report notes.
What is “death cross” and “golden cross”?
Many who watch the charts believe that the “death cross” indicates the spot that a shorter-term drop transforms into a longer-term downtrend. The golden cross is when the 50-day moving average crosses above the 200-day moving average. The golden cross is seen as the mark when a shorter-term rally changes into a longer-term uptrend, the report notes.
The only other time Apple’s 50-day moving average stayed below its 200-day moving average for a year was from Oct. 9, 1995, to Nov. 21, 1996. At that time, the subsequent bullish “golden cross” persisted less than two months, and the prices returned to drop almost immediately, the report notes.
On August 26, 2015, when the stock closed at $106.69, the 50-day moving average for Apple’s stock last crossed below the 200-day moving average, which many analysts look as a dividing line between longer-term down trends and uptrends.
What it suggests for Apple stock?
As per FactSet data, on Friday, Apple’s 50-day moving average extended to $101.5076, and over the past month, it has been increasing by a daily average of 19.2 cents. The 200-day moving average has been declining by about 4.6 cents a day and came in at about $102.73. A golden cross would appear on Sept. 6 at current trajectories, the report notes.
So far, there have been 24 Apple Inc. golden crosses, and their record have been mixed as a “buy signal at best,” the report notes. However, the golden cross after the Nov.22 1996, the stock continued its drop within days. The next death cross appeared on Jan. 10, 1997. The stock didn’t bottom out until it fell another 48% through July 2, 1997. For Apple’s stock there have been 24 previous death crosses.
Apple CEO sells stock
Separately, as per the securities filing on Friday, Tim Cook – Apple Inc. CEO – sold $36 million worth of stock this week. Cook just passed his 5th year managing and controlling the iPhone maker, lifting the restrictions on 1.26M stock that he had been awarded before.
As per the filing, to meet tax withholding requirements, the tech giant withheld more than 656,000 shares while, Cook chose to sell 334,000 shares on the open market, collecting around $36m. Over the past year, the Apple stock has lost 2.1% and the Dow Jones Industrial Average gained around 13%.
On Friday, Apple shares closed down 0.59% at $106.94. Year to date, the stock is down almost 1%.