Apple (AAPL) Investors Beware! Risky Move Before Q2 2024 Earnings
Chris Johnson discusses the potential decline in Apple stock, comparing its current situation to the dot-com bubble in 2000, focusing on three factors: fundamentals, technicals, and sentiment. The analysis suggests that Apple may be in need of innovation and shows negative technical indicators, indicating a potential long-term bear market. The video also highlights target price levels and warns of potential selling pressure.
[00:00]( • Apple (AAPL) Investors Beware! Risky ... ) Chris discusses the upcoming Apple earnings and compares the current situation to Apple's performance in March 2000.
Chris mentions that Apple's value fell by 80% during a long-term bear market in 2000.
They highlight the importance of monitoring the fundamentals, technicals, and sentiment of a stock.
Chris suggests that all three components currently align for Apple, similar to the situation in 2000.
[03:24]( • Apple (AAPL) Investors Beware! Risky ... ) Apple's lack of innovation in the past led to their decline, but they regained momentum with the introduction of the iPod and iPhone.
Microsoft's lack of innovation caused them to shift to subscription models.
In 2000, Apple's late investment in new product development coincided with the dot-com bubble and a decline in the company.
Sentiment for Apple stock in 1999 and 2000 was extremely positive, with analysts recommending it as a buy and high target prices.
The introduction of the iPod in 2002 marked a turning point for Apple, leading to billions of dollars in revenue.
The iPhone became a significant source of revenue for Apple, but their recent decline is attributed to the lack of new innovations.
[06:51]( • Apple (AAPL) Investors Beware! Risky ... ) The video discusses the weak fundamentals of Apple stock and emphasizes the importance of technical analysis.
When fundamentals start to fail, technical analysis becomes more important.
The analogy of flying by sight versus flying by instrument is used to explain the shift to technical analysis.
The 50-day moving average is highlighted as an important trend line for Apple stock.
The pattern of lower highs and lower lows indicates continued selling pressure.
[10:16]( • Apple (AAPL) Investors Beware! Risky ... ) The video warns that Apple's stock may reverse and enter a bear market trend due to the alignment of the 50-day and 200-day moving averages, similar to the situation in March 2000.
Tesla's stock experienced a similar situation with the death cross, but it popped higher due to hope for new models in 2024-2025.
The alignment of the 50-day and 200-day moving averages before earnings suggests caution for Apple shareholders.
The monthly chart of Apple shows that it is currently below the 20-month moving average, indicating a potential shift to a bear market trend.
[13:43]( • Apple (AAPL) Investors Beware! Risky ... ) The analyst explains that although there have been some challenges in the past few months, sentiment towards Apple stock remains too optimistic, as there are no sell ratings and target prices have not come down.
Analysts have moved from strong buy to buy or hold, but no sell ratings.
Target prices have not decreased.
Sentiment towards Apple stock is still too optimistic.
The fundamentals of the company are lacking, with revenue and earnings per share coming down.
The technicals of the stock indicate negative momentum, with the 50 and 200 day moving averages pulling back and rolling over.
[17:09]( • Apple (AAPL) Investors Beware! Risky ... ) The stock has broken below $175 and is expected to reach $150 as an intermediate term target within the next four to six weeks.
$150 has historically acted as a level of support for the stock.
If pressures continue, the stock may drop to $125, which was seen in 2003.
The next level of support after $125 is at $100, where overwhelming pressure may push the stock higher.
It is important to monitor the 20-month moving average, specifically around the $165-$160 mark, for increased selling pressure.
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