Apple Stock Price Levels to Watch Ahead of the iPhone 16 Launch Event
Image Source: CNBC
It's once again Apple Inc. attention as the technology powerhouse heads into its popularly anticipated "Glowtime" product launch event on Monday. The tech giant is set to introduce the new AI-powered iPhone 16, along with other devices, and announce details on significant software updates, including Apple Intelligence-enabled iOS 18. This event can prove to be one massive catalyst for Apple shares, with investors closely eyeing key price levels as the market readies itself for potential volatility.
Apple's stock has regained much of the lost ground since its recent correction in early August, surging some 13%, as investors expect a whole lot from Monday's showcase. However, market analysts noted that Apple's stock has usually performed below the S&P 500 on the same day of an iPhone launch event and surges higher by a modest amount over the next three months. This could set up a "sell-the-news" event, according to which traders would take their profit after the event.
Below, we analyze Apple's stock chart through technical analysis, highlighting key areas of support and resistance investors should be keenly watching as the maker of iPhones holds its largest event of the year.
Price Volatility Following Record Highs
Apple's stock, AAPL reached a new all-time high in mid-July but pulled back as much as 17% to test an early June breakout area. The stock had regained much of that decline throughout August. But in the last few sessions, Apple's stock has closed below its 50-day MA-a key technical level. However, trading volumes have remained low, indicating there isn't heavy selling at this juncture. On Friday, shares of Apple fell 0.7% to $220.82 as technology stocks broadly declined.
Moving forward, there are a few key price levels that could be in play for Apple's security, especially with the "Glowtime" event at hand.
Key Levels of Support to Watch
1. Initial Support at $218: Should there be an increase in selling pressure, Apple's shares could test $218. This zone has technical significance because it corresponds to a trendline drawn between various points of trading activity between the peak of June and the trough of July. Investors may consider this level as the immediate buying opportunity if the price finds support here.
2. Next Support at $207: If the price cannot stay above the $218 level, then it will probably continue to decline to around $207. This is around the close price of the breakout candlestick on June 11 and almost perfectly aligned with the low of the pullback in June. This is where investors can set a buy limit order as they might anticipate that it will rebound from there.
3. Major Support at $196: In case of further downside movement, Apple can always retreat to the low set last month at $196. This should be a level that can lure bargain hunters who are looking for buying opportunities near the initial breakout area that most likely flipped from resistance to support. Also, this is close to the rising 200-day MA, which is an important long-term trend indicator that could serve as added support.
Levels of Resistance to Watch
1. Resistance Near $233: If the Apple stock were to build momentum on the back of the "Glowtime" event, shares could meet resistance close to $233. This is close to a cluster of trading activity just below the ATH. It may be a good point whereby taking profits in case the price approaches resistance levels could be a good idea, since it may turn out as a serious obstacle for the price to overcome.
Conclusion
With Apple set to show new releases, including the AI-powered iPhone 16, its stock is set for increased volatility. Investors should keenly watch the above-identified key support and resistance levels for any probable price movements around this key event. While the "sell-the-news" reaction can occur, the longer-term performance tendencies of Apple suggest that strength following the initial volatility may give both short-term trading opportunities and longer-term investment prospects.
Disclaimer: The views in this analysis are for information purposes only and should not be considered as investment advice. I have no position in Apple or any of its securities as of the date of this publication.
By watching these key levels closely, investors can then position for possible price movements that could result from a big product launch or market-moving event for such a powerful company as Apple.
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