Stock Of The Day: Apple Is In The Driver Seat

In the stock market, different things are in the driver’s seat at different times. It can be a particular sector or industry. It could even be an important commodity like oil.

But sometimes, and can be just one individual stock that could influence the direction of the entire market. And that's the case now with Apple Inc. AAPL. That's why our team of trading experts made it our Stock of the Day.

When markets are headed down it's because they are out of equilibrium. There are more shares for sale than there are to buy. Because of this the price trends lower.

When they reach a support level, the tide turns. There is enough demand, or buy orders, to absorb all of the supply, or sell orders.

As you can see on the chart, after a nasty selloff, shares of Apple found support at the $218.00 level. At least for now, the price has stopped going lower.

Read Also: Apple Joins Meta And Google, Pledges Support For Biden’s AI Regulations

There is a reason why there is support at this price. It was a resistance level in June, and levels that were previously resistance can convert into support. This is a common occurrence not just in the stock market, but it all financial markets.

This happens because there are traders and investors who sold their shares of AAPL when the stock was at resistance. At first, they thought they made a good decision because the stock moved lower after they did so.

But the price eventually moved above $218.00. When this happened, many of these sellers thought that they actually made a bad decision. Some vow that if the stock eventually reverses and falls back to their selling price, they will buy their shares back.

So as a result, now that AAPL has returned to this price these remorseful sellers are placing buy orders. And as for now, this large concentration of these orders has created support and put a floor underneath the shares.

If this support breaks it will mean the buyers have either finished or canceled their orders. This will set Apple up for a move lower. And this could bring the entire market down

But if it holds, the market should be able to work its way higher. Right now, Apple is in the driver's seat and it's about to tell the market which way to go.

Read Next:

• Fed’s Preferred Inflation Measure Shows Mixed Readings, Personal Income, Spending Fall: September Rate Cut Remains Likely