Shares of Apple are quite oversold

Apple’s shares have become very oversold in the past two weeks as Mizuho and Pacific Crest downgraded the stock from Buy/Overweight to Neutral/Sector Weight, respectively, and tech stocks took a hit. Their main reason centered around iPhone 8 expectations being baked into the stock given their recent strength and that valuation levels while not excessive don’t allow for much upside.

The Apple logo at the entrance to the Fifth Ave. Apple store. Photo credit should read DON EMMERT/AFP/Getty Images

With Apple’s Worldwide Developers Conference over and the next financial update not due until late July the stock will probably move based on sentiment shifts, analysts updates and overall market moves.

Stock has been strong the past year

After falling to a closing low of $92.04 on June 27, 2016, the stock is up 55% to Friday’s close of $142.27. And even after being under pressure last week by falling 4.5% it has still risen 23% since the beginning of the year.

Apple’s shares had a closing high of $156.10 on May 12 and an intra-day high of $156.65 on May 15. They stayed in the $150’s for a month until it along with the FANG and tech stocks took a big hit on Friday, June 9.

Short-term but worthwhile metrics

While only a short-term indicator a stock’s RSI (Relative Strength Index, the top section of the chart below) and MACD (Moving Average Convergence Divergence, bottom section) I believe are worthwhile items to add to a stock investors bag. As can be seen in the chart when Apple’s RSI hits 30 (currently at 30.98) or below and MACD enters negative territory (currently at -5.578) the shares tend to bounce back.

Apple's shares the past three years.

Source: Apple’s shares the past three years.
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