Apple Inc. shares were selling for less than $100 each on Monday’s morning pre-market. It’s the first time that shares in the firm have sold for less than the key psychological level since October of last year. Traders, heading into one of the worst morning markets in recent history, are looking for the next major support level.
With shares across the market being crushed by what looks like a melt down in China, traders are fleeing the stock market en masse. Apple is being hit harder than the market at large on Monday morning. That may be due to an over-exposure to Apple in major portfolios, or fears that China’s problems could hurt real demand for the iPhone and other Apple products.
Apple looks for support
Technical analysts had highlighted $100 as a key support level for Apple shares. Shares in the firm first hit below the 200 day moving average on August 3. Last week was not kind to the firm, and Monday appears set to be the worst day for the firm in a very long time.
The last time that Apple broke through its 200 day moving average it fell through all sorts of support levels and failed to recover for two years. That was in October of 2012. Richard Ross said in early August that “The stock is sitting right at a critical support level.” It’s fallen very far since.
Since then it’s broken through more than one of those key support levels. Late last week analysts warned of an Apple “Death Cross.” That’s when a stock’s 50 day moving average goes below its 200 day moving average.
Apple dives on market breakdown
The wider market was bearish on Monday morning. The S&P 500 was down by more than 3 percent at time of writing. Apple had lost more than 7 percent at the same moment. Stocks that have a lot of growth priced in are getting hit harder, and hurt more, in this morning’s market.
Wall Street appears comfortable with putting Apple in that group despite the fact that its multiple is lower than the market as a whole. That gap is growing as traders worry that Apple won’t be able to meet guidance on iPhone sales in the months ahead.
Kevin Landis, FirstHand Capital Management CIO told CNBC on Friday that “Apple has a lot of exposure there, and they’ve pinned a lot of their growth to that market and they’re going to have to pull those expectations down a bit.”
It’s not clear what is causing the massive loss in value of Apple shares, but it’s likely driving more and more traders to re-think their exposure in the midst of the massive global meltdown that’s going on right now.
We’re going to have to wait until later today before we get an appraisal of Apple from the chartists and the technical wizards. In the mean time almost every single analyst on Wall Street is saying that Apple is cheap at its current share price. They said that last week too, however. If you’re buying in in this market, a short term bet simply won’t do.