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Apple, Inc AAPL plunged almost 6% on Tuesday, leading the markets lower.
Big tech was hit hard, causing the S&P 500 to close down 4.32%, the largest single day decline since June 11, 2020, shortly after the COVID-19 pandemic gripped the globe.
The sharp decline was a bearish reaction to consumer price index (CPI) data released by the U.S. Labor Department, indicating that although inflation likely peaked in July, the inflation level hasn’t come down to where analysts expected.
For the month of August, CPI reached 8.3%, down from 8.5% in July. Economists estimated CPI would come in at 8%.
The data sparked fears the central bank will raise interest rates by 0.75% or even by a full percentage point when it meets next week. After the central bank raised rates by 0.75% in both June and July, traders and investors hoped the hawkish move would tamper inflation quickly and allow for the Federal Reserve to start easing its policy.
In terms of Apple’s chart going forward, both a bullish and bearish thesis have presented on the chart, and time will be needed to decipher the direction in which the stock — and the general market — is heading.
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The Apple Chart: The sharp decline on Tuesday, which took place on higher-than-average volume, indicated fear selling because there were far more buyers than sellers.
On Wednesday, Apple opened with an inside bar, which indicates consolidation may be needed before the stock chooses a direction.
- The inside bar leans bearish in this case because Apple was trading lower before forming the pattern and because Wednesday’s candlestick was printing near the bottom of Tuesday’s trading range.
- Traders and investors can watch for the stock to break up or down from Tuesday’s mother bar on higher-than-average volume to determine the future direction.
- If a Fibonacci retracement tool is used to map out support and resistance on Apple’s chart, the stock may find resistance at the 1.382 level ($157) on a bounce. If Apple breaks down from the inside bar pattern, the stock may bounce up from the 0.618 ($146) mark.
- Traders and investors can watch for Apple to print reversal candlesticks at those levels to indicate the temporary move in either direction is complete and a reversal will take place.
- Apple has resistance in terms of price history at $158.09 and $162.14 and support below at $153.92 and $150.
See Also: Apple To Use Latest TSMC Tech In iPhones, Macs Next Year, In Industry First: Report
Photo via Shutterstock.
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Image and article originally from www.benzinga.com. Read the original article here.