Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 05 August 2015 at 13:30 GMT

Buy Apple now? Don't catch a falling knife

Technical Analyst / Saxo Bank
  • Apple shares are continuing to slump
  • Technical indicators suggest a move to around $100-105
  • Bears could even test of the $100 level

By Kim Cramer Larsson 

Apple is experiencing its biggest drop since 2012. Since its all-time high it is down by 15%. For some it might seem to be a good time to buy Apple cheap, but I think this would be like catching a falling knife. We might see a minor rebound, but I do not see any major turnaround in the near future. 

On the daily chart we can see how Apple stock has dropped below the 200-daily moving average for the first time since 2013 and below the support at around $120.

There was a warning sign a couple of weeks ago with a bearish engulfing candle followed by a major gap down. Unfortunately I was on holiday so didn't see it. 

New bearish technical signal in Apple's chart
Apple daily
Source: Saxo Bank

There is no divergence on RSI and MACD, and Bollinger bands® are expanding on both daily and weekly indication that we are in the developing stage of the move. 

A move to take Apple down to around the $104-105 level – which was the consolidation area back in January and is the 38.2 retracement of the bull move since 2013 – is very likely. 

It has formed what looks like a head and shoulders pattern breaking the neckline, which also indicates a target price around $105.

Weekly RSI, which has shown divergence since Q1, is currently testing the 40 threshold, so where it ends this week could be a good indication of the medium-to-longer-term direction. 

However, I would still be cautious to buy at that level before I see what the indicators and the market tells me. 

Bears are in control and might want to try to test the $100 level
Apple weekly
Source: Saxo Bank

– Edited by Oliver Morrison

Kim Cramer Larsson is a technical analyst at Saxo Bank


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail