The Apple share price surrendered gains in yesterday’s session to close flat on the day after the release of new services for the Apple watch was not the blockbuster event that investors expected.
Apple product innovations have been lacklustre in the last years with the resurgence in the stock being driven by services growth from the app store and other areas such as Apple tv. The expectations for earnings have been boosted by the planned release of 5G phones and performance was strong enough despite the closure of many Apple stores during the lockdowns. Investors were hoping to hear an update on the iPhone and the selling was likely driven by profit-taking.
Apple shares have dropped from a high on September 2nd, which followed a 4:1 share split at the end of August. Traders have been concerned that tech stocks are overvalued and this is adding pressure to the price of companies such as Apple. In the company’s most-recent earnings release on July 30th, they announced revenues up 11 percent and earnings per share higher by 18 percent to new June quarter records.
At the watch event Apple also released an upgraded iPad Air and announced Fitness, which will be a streaming fitness program for Watch owners. The new service will combine the health-tracking capabilities of the Apple Watch with instructor workouts, which have been successful for companies such as Peloton.
Apple’s September high came in above $135.00 and the stock now trades at $115.80 in the premarket. The stock still has risk of further losses to the uptrend support which comes in around the $110 level. That level is a key barrier to the gap under $100. The stock could see another push for the highs with a strong move above the $120 level.