Two key psychological factors are currently influencing Apple’s (AAPL) share price. Firstly, Warren Buffett’s recent decision to reduce his AAPL stake by approximately 50% has raised questions. This move could suggest that Buffett perceives potential challenges for Apple, whether it’s a loss of market dominance or looming recession risks. Regardless of the reason, Buffett’s reputation may have a psychological impact on retail investors, potentially leading them to sell their shares.
Secondly, the breach of the $200 psychological threshold has been significant. Following a robust increase above $200 per share in June, the price appeared to have firmly established itself above this level. Nonetheless, such breaches often lead to retests, trigger stop-loss orders, and shift the supply-demand balance, which can result in price fluctuations. For instance, yesterday’s trading saw bulls almost completely close a 7% bearish gap.
Today’s technical analysis of the AAPL stock chart reveals the following:
→ The last two broad candlesticks, which opened at the lows and closed at the highs, suggest strong demand activity. → Since May, AAPL’s price has been following an upward channel (illustrated in blue). The stock closed near the median line yesterday, which could serve as a point of stabilization. → If bearish pressure persists, pitchfan ray #4 might offer support. The chart indicates that the stock price has previously found support at this ray, visible as upward trends with decreasing angle steepness.
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Additionally, CNN Money’s Fear & Greed Index has recently moved into the “Extreme Fear” zone, reflecting a further decline in market sentiment. Would Buffett adhere to his well-known 1986 advice: “Be fearful when others are greedy, and be greedy when others are fearful”?
According to a TipRanks survey of 32 Wall Street analysts, 24 recommend buying Apple stock. Their average target price for AAPL over the next 12 months is $248.96.
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