Apple Inc. (AAPL) Stock Pulls Back in Wake of “Bullish” Apple Event

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All things considered, Tuesday’s Apple event — an unveiling of the newest iPhone from Apple Inc. (NASDAQ:AAPL) — pretty much went as expected. CEO Tim Cook didn’t throw any curve balls, and Apple fans responded with the requisite cheers, even if AAPL stock slipped back into the red once the stage went dark.

Apple Inc. (AAPL) Stock Pulls Back in Wake of "Bullish" Apple Event

Source: Apple

The $64,000 question mostly remains unanswered, however. That is, can Apple stock continue its bigger-picture rally, moving deeper into record-high territory?

Or, will the unveiling of the iPhone and a handful of other updated products remind us of how “buy the rumor, sell the news” earned its status as a market axiom in the first place?

It remains to be seen, but we do know AAPL stock is forcing traders to make a major decision at a time when it’s facing more than its fair share of disadvantages.

New Apple Product Specs

There’s no sense in ignoring the 800 pound gorilla in the room. The new iPhone — one of them — will indeed be called the iPhone 8 (and 8 Plus), complete with the anticipated dual lens camera capable of taking 12 megapixel pictures, an all-glass front and back, a powerful six-core A11 processor, available in 4.7 in inch and 5.5 inch versions that are more than capable of meeting most augmented reality demands.

Consumers will also have the choice of 64GB storage and 256GB versions. The iPhone 8 starts at a price of $699, while the 8 Plus will have a base price of $799.

The higher-end iPhone X is, as expected, a screen from edge to edge, and like the iPhone 8 is made of ultra-durable glass on the front and back with just a narrow band of stainless steel around the edge for the 5.8-inches-worth of diagonal OLED screen. There is no home button. Users just swipe in an upward direction to bring up the home screen.

Camera-wise, its f/1.8 and f/2.4 apertures are a bit faster than those of the iPhone 8, and owners will enjoy a battery life that’s two hours better than the iPhone 7’s typical longevity. As rumored, the device is unlocked by digitally looking at the owner’s face (with no chance of fooling the phone’s sensors). Like the iPhone 8 will come in a 64GB and 256GB version.

The sticker price starts at $999.

The unveilings took place at the new Steve Jobs theater at Apple’s campus in Cupertino, California.

In conjunction with the debut of two new phones, AAPL reiterated its value pricing of the iPhone 7 at $549 and up. The 6S can now be purchased as low as $449, though all of the new iPhones are relatively affordable.

Tuesday’s Apple event wasn’t just about the new phone, however. Tim Cook touted the fact that watch sales were up 50% year-over-year for the quarter ending in June, and earned a 97% customer-satisfaction score. The new heart monitoring features on the next generation of watches should make them even more marketable, as will the fact that it can connect directly with wireless networks; the new watch will essentially offer the same mobile-web functionality as your phone.

Also unveiled were a new Apple TV box that can stream 4K video and HDR video.

Nevertheless, the post-show buzz was all about the iPhone, which still drives about 60% of the company’s revenue and indirectly drives a fair portion of its services revenue.

AAPL Stock: Now What?

The pre-event bullishness to the new iPhone isn’t surprising; we’ve seen it before. Just don’t bet the farm on any follow-through, because we’ve also seen the initial surge of buying following a product launch give way pretty quickly, as most of the product-related bullishness gets priced in before said product hits store shelves.

The chart of Apple stock below tells the tale. Although new product unveilings can be very good for the stock following sizeable pullbacks, unveilings can also set up waves of profit-taking following the debut of new products. The outcome may have more to do with a pattern of ebb and flow than the strength or weakness of new consumer technologies. That ebb and flow has also been clearly framed by support and resistance lines.

Apple (AAPL) stock slides after new iPhones unveiled
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You don’t have to be a veteran technical analyst to realize that AAPL stock is technically overbought thanks to an 80% runup since the middle of last year. The slowdown at a technical ceiling shouldn’t be a surprise.

It should, however, be a worry for Apple stock investors.

Indeed, the fact that AAPL stock moved rather deep into profitable territory for the day during the event but quickly slipped back into the red as the presentation came to a close tacitly suggests a wide swath of traders were planning on selling their stake even though Tim Cook delivered exactly what was expected.

Bottom Line on Apple Stock

Truth be told, it could take a couple of days for the dust to settle and for the parties on both sides of the table — the bulls and the bears — to regroup and get the stock moving decidedly in one direction or the other. Waiting for that clarity has its advantages to be sure.

Still, inasmuch as so many observers were so certain the Apple event would open the bullish floodgates, the lack of decided bullishness after the fact speaks volumes. It says even more when you know the stock’s already bumped into a proven technical ceiling. If Tuesday’s bearish response is allowed to develop any momentum and fall under last week’s low of $158.63, it’s alarmingly likely AAPL stock traders won’t waste much time deciding that it’s time to “sell the news.”

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.


Article printed from InvestorPlace Media, https://investorplace.com/2017/09/apple-inc-aapl-stock-apple-event/.

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