Apple Inc. shares were down again on Monday, breaching the three key support levels, which many bullish investors would have hoped to have held, says a report from USA Today. On Monday, the stock was down 2.68% to $118.72.
Apple stock breaks 3 key levels
The decline in the stock is noteworthy as it broke key levels. Now, the stock is down over 10% from its highest point in the last year, suggesting the stock to be in a correction phase. On April 28, Apple shares hit the 52-week and all-time high of $134.54.
On three occasions, the stock had hit that level, but has failed to move past beyond it, suggesting investors had a mental block to sell the shares as soon as the stock hits that level, says the report.
Monday’s decline also pushed the stock down its 200-day moving average of $120.87, which is another key level. The 200-day moving average represents the average price that the investors have paid for the Apple stock over the past 200 days.
Investors look at the 200-day moving average to get a hint of the long-term trends, but stock breaching this level, can be seen as a negative sign. It must be noted that the iPhone maker has not breached its 200-day moving average since September 2013, says the report.
The third level Apple stock broke was the $120 price level, which many thought would have acted as a floor. The level was vital as last time when the stock fell into the danger zone on July 9, it found buying support at this level, says the report.
What are investors upset about?
Many reasons can be seen as responsible for upsetting the investors. On Monday, a report from the research firm Canalys revealed that Apple has been pushed to the third place in China by local players Xiaomi and Huawei, in terms of smartphone sales in the 2Q.
Investors are also upset over Apple missing shipments of all its major products. Many experts view this as an evidence of slowing Chinese economy, which is a negative sign for Apple as the company is expecting China to drive its iPhone growth going forward.
Microsoft Windows 10 is expected to give a tough fight to the iPad and Mac. Jefferies analysts, in a recent research note, said they have tried Windows 10 on Surface 3 laptops, and found it to be much better than the Windows 8 experience.
With Windows 8, which was a bit confusing, Microsoft has itself provided Apple with a lead for the iPad and Mac sales in the enterprise. Jefferies also believe that Microsoft Cortana will be a good rival to Google while “Apple remains further behind in this area.”