Apple
Apple (AAPL) shares are bucking today’s market rally, heading lower by nearly 2%.
Shares of the iPhone and other electronics manufacturers have been taking a hit from the headlines over the last few days…
- Reuters - “Apple loses top phone maker spot to Samsung as iPhone shipments drop”
- Barron’s – “Apple Faces $8 Billion in Profit Risk, Analyst Says. That’s Not the Stock’s Only Problem.”
- Barron’s – “Apple iPhone Shipments Drop 10% in Market Share Battle With Chinese Rivals”
To add to the headlines, analysts at Needham lowered their price target on Apple stock this morning. Historically, we haven’t seen this type of analyst activity on the stock, which means more are likely to happen as the company’s earnings release approaches on May 2.
From a chart perspective, things could get uglier.
Last week, the stock rallied from its lowest price since the October 2023 bottom. The fast 6% really took the stock directly to its 50-day moving average, where it encountered immediate resistance.
That 50-day moving average has been in a bearish trend since January, adding overhead pressure.
From here, the stock is likely to target a move back to those October lows, $165, with a higher percentage chance that those lows will give way to even lower prices.
From there, the downside risk is clear to $150, barring any bad news from the upcoming earnings report.
A bad earnings report in May would set the market’s eyes on another 18% decline to $125.
Rivian
Rivian (RIVN) stock is trading higher today for two reasons.
First, the EV maker received an upgrade from a Wall Street analyst this morning. Shares were moved from a “Sell” to “Neutral” by UBS, as the firm thinks that the company’s valuation is now more in line with their fundamentals.
UBS also pointed out that the EV industry has become tighter, and that Rivian still faces increasing competitive concerns in the space.
The upgrade comes as Rivian shares dropped from $10 last week to lows of $8.20 on Monday. As we pointed out in a recent video, the $8 level is often a psychological and technical support level for stocks that break $10.
The expected bounce at $8 is likely to form what we refer to as a “dead cat bounce,” as shares approach $9. From there, expect Rivian stock to continue its decline to $5.
Rivian earnings are slated for May 7.
Live Nation
This morning, The Wall Street Journal reported that the Department of Justice is likely to file an antitrust lawsuit against Live Nation (LYV) in May.
The suit is based on antitrust claims that were magnified by the Taylor Swift concert ticket mayhem during the first sales of Swift’s Eras tour. Two class action lawsuits were filed by fans against Ticketmaster, a Live Nation company, after the company encountered website outages, delays, and other problems that disappointed fans.
Rumors of the potential suit made their rounds in the market on July 28, 2023, causing the stock to careen lower by 20% on the same day. Live Nation stock spent the rest of 2023 trading in a range, despite the company’s positive earnings and outlook.
The stock trades slightly higher for 2023, but that’s likely to change over the next few months.
The good news is that the lawsuit and its implications are now being “baked into the cake” starting today. Further declines are likely but will probably result in a wide trading range.
The stock’s long-term trend remains bullish, with support at $83, which is very close to the price the stock traded at after the initial news hit the wire in July 2023.
The bad news is that the slow wheels of justice will add a degree of uncertainty to the stock while the lawsuit is ongoing.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.