As market turbulence sweeps across sectors, Apple Inc. AAPL is not immune. The tech giant’s stock has encountered double-digit declines in August, resulting in a staggering loss of around $400 billion in market capitalization.
With nine trading sessions still to go, August has proven to be the worst month of the year so far for the iPhone maker. Adding to the gloom, Apple is currently facing a three-week losing streak, a situation not seen since the final days of December 2022.
Technical Analysis: Apple’s Stock Hit Oversold RSI Levels, Break Below Key Moving Average
Apple’s latest price action has been under the spotlight of traders using technical analysis to support their decisions.
The popular Relative Strength Index (RSI), calculated based on the past 14 daily closing prices, which is typically seen as a key momentum barometer, has plunged into oversold territory (below 30) for the first time this year.
The swift slide in Apple’s stock prompted a sharp breach below the average price of the past 100 days. Such a move hadn’t occurred since November 2022, signaling a significant shift in market sentiment.
Read also: What is RSI?
Apple 1-day Chart: Moving Averages, RSI, And Fibonacci Analysis
Key Levels To Monitor Next
Despite some timid buying interest observed on Friday, propelling Apple’s stock by a modest 0.2%, the RSI’s position in oversold territory implies that sellers continue to have the upper hand in the short term.
Attention is now focused on the pivotal support level at $161. This price point corresponds to the current 200-day moving average and marks the 50% Fibonacci retracement level between the highest and lowest prices observed in 2023.
If Apple’s stock experiences a decisive decline and breaches the halfway point of its 2023 bullish trajectory, it could raise further bearish concerns.
A potential drop to $152.40, marking the 61.8% Fibonacci retracement level, can’t be excluded, and such a scenario would signal the entry into a bear market, reflecting a downturn of over 20% from July’s high.
Notably, Apple’s last bear market began exactly a year ago on Aug. 18, 2022, reaching a maximum 30% drawdown on Jan. 3, 2023.
For now, the technical outlook leans toward a bearish perspective, as we await stronger bullish signals that could shift the market sentiment.
To challenge the prevailing short-term bearish momentum, Apple’s stock must overcome the resistance at the 100-day moving average ($178) and successfully break above the 23.6% Fibonacci retracement level at $180.68.
On the other hand, a promising bullish reversal signal might arise if prices set a fresh low while the RSI shifts to an upward trajectory, indicating a weakening of bearish momentum.
Investors should remain attentive to upcoming events in the following week, as China-related headlines and the Jackson Hole symposium could exacerbate market volatility.
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