Apple Inc.’s stocks sell-off seemed to be the biggest drag on the Dow Jones Industrial Average (DJIA) after the tech giant reported disappointing earnings result for the fourth quarter.
Shares of Apple Inc. declined $2.85 or 2.4% during the session, marking it as the biggest decliner among the Dow’s 30 components.
The DJIA is a price-weighted index, which suggests that prices of the index is identified by any price changes on its components’ stocks, rather than changes in percentage. Hence, the companies with the highest stock price corresponds as the most influential on the Dow.
Subsequently, numbers of other major market indexes are market-capitalization weighted such as the S&P 500 index and the Nasdaq Composite Index, which are more influenced with companies that have higher market valuations.
Analysts Reacts on Apple First Annual Revenue Drop
Apple issued its first annual decline in revenue in over 15 years on Tuesday.
The tech giant’s earnings results for the quarter topped analysts’ expectations, but it appears that iPhone sales had posted declines for three consecutive quarters now on a year-over-year basis.
Shares of the company declined by about 3% and settled at $114 from $118 at the close of trade.
Hence, the early verdict from analysts on the company’s quarterly results is in, and seemed to be pretty tepid. During the last six months, Apple analysts noted a large bullish on the company’s stock to merely somewhat bullish, while some cases issued neutral.
Apple Inc.’s Quarterly Report Suggests Acceleration
BMO Capital analyst Tim Long has reiterated his positive views on the company’s stock following the earnings report for the fourth quarter fiscal year 2016. Meanwhile, analyst mentioned that the quarterly reports are likely solid and the guidance suggests an acceleration in the next quarter.
Some analyst claimed that iPhone sales will strongly boost in the next quarter, but the company’s profitability could remain flat in arrears with minimal deceleration in margins.
Current Stance of Apple Inc’s Shares
The chart below illustrates Apple Inc. stock’s movement after reporting its financial earnings for the fourth quarter.
Given the recent trend shown, market participants were given signal to open Buy position on the trend’s third candle, which in fact did showed a movement on the green. In essence, the stock price rested below the trendline, which tried to break out on the upside at support 115.02 in a heavy trading volume on October 26, 2016.
Given a bearish tone on Apple Inc.’s stocks, our study suggests that the biggest downfall of the tech giant was due to its disappointing results on iPhone sales, which significantly weighed on the Dow Jones Industrial Average.
Moreover, investors should wait on the sidelines until a supporting candle shows up.
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