How Will Apple Stock React Following 'Peek Performance' Product Launch?

Apple, Inc AAPL was trading over 2% higher in the premarket on the day following its “Peek Performance” launch event, where the company unveiled a number of new products.

The tech giant will launch its iPhone SE with A15 bionic processors and its new M1 ultra chips, which will power its new Mac desktop --Mac Studio-- with Studio Display and the latest version of the iPad Air. The new products will be available beginning March 18.

Loup Capital's managing partner Gene Munster, who interviewed on Benzinga’s “PreMarket Prep” on Wednesday, said his biggest takeaway from Apple’s product launch was the 8% price increase on the entry level iPhone SE, which is priced at $429.

Munster also praised Apple for its success, despite the headwinds, for continuing to develop new products and noted this is only the first Apple event scheduled for this year.

On CNBC's "Fast Money Halftime Report" on Tuesday, Hightower Advisors' Stephanie Link said she had decided to add to her position in Apple. Link considers Apple to be a defensive stock due to its strong cash position and ability to buy back outstanding shares.

Apple’s event didn’t boost the stock on Tuesday, partly because the SPDR S&P 500 ETF SPY was so heavily pressured to the downside by the ongoing geopolitical unrest. On Wednesday, the general markets looked to be in for a big bounce, however, and Apple is likely to follow.

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The Apple Chart: On Wednesday, Apple opened the trading session about 2.5% higher than Tuesday’s closing price, but immediately ran into a group of sellers who knocked the stock down almost 1% off the open. Apple declined over 5% between March 3 and Tuesday, which indicates the stock may settle into an inside bar pattern on Wednesday.

An inside bar is a consolidation pattern and is usually formed on lower-than-average volume. In Apple’s case, an inside bar at this time would lean bearish because the stock was trading lower prior to forming the pattern, but traders can watch for a break of Tuesday’s mother bar to gauge further direction.

Apple is trading in a confirmed downtrend, with the most recent lower high created on March 3 at the $168.91 mark and the most recent lower low formed on Feb. 24 at $152. The break of the inside bar on Wednesday or Thursday will give traders an indication of whether the downtrend will continue, or if Tuesday’s candlestick marked a higher low and the stock will reverse course.

Apple is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see big bullish volume come in and break Apple up from Tuesday’s mother bar, which will cause the stock to regain support at the eight-day EMA. There is resistance above at $162.14 and $167.88.
• Bears want to see big bearish volume continue to drop Apple down until it falls below the $152 area, which will confirm the downtrend is still intact. Apple has support below at $157.26 and $154.39.

Photo: Courtesy of John Loo on Flickr