Short Trade Idea
Enter your short position between $243.42 (the intra-day low of its current downtrend) and $249.41 (Friday’s intra-day high).
Market Index Analysis
- Apple (AAPL) is a member of the NASDAQ 100, the Dow Jones Industrial Average, the S&P 100, and the S&P 500 indices.
- All four indices trade off their highs with rising bearish trading volumes.
- The Bull Bear Power Indicator of the NASDAQ 100 turned positive but remains below its descending trendline.
Market Sentiment Analysis
Equity futures are pointing lower this morning, following two weeks of losses, ahead of the busiest week of earnings season. Gold surged past $5,000 per ounce as geopolitical tensions and economic issues continue to rise. On the earnings front, Microsoft, Meta, Tesla, and Apple will dominate headlines later this week. The US Fed is expected to keep interest rates on hold this week, but markets will focus on its outlook and more details about the next Fed Chair, with BlackRock’s Rick Rieder rumored to be a favorite.
Apple Fundamental Analysis
Apple is the largest tech company by revenue and the third-largest company by market capitalization. It is at the core of the US tech industry, but it is missing out on several disruptive trends. Still, it has high brand loyalty and a massive following.
So, why am I bearish on AAPL ahead of its earnings release?
I view the iPhone 17 as a one-time event, and Apple may report better-than-expected unit sales, but I am bearish on its AI strategy, where it trails industry leaders. Also, margin pressures are rising, competition with Samsung is intensifying, and I see a supply chain-related cost increase. Valuations are high, growth prospects are muted, Apple has lost core executives, and insider selling picked up in late 2025.
Metric | Value | Verdict |
P/E Ratio | 33.20 | Bearish |
P/B Ratio | 49.44 | Bearish |
PEG Ratio | 2.51 | Bearish |
Current Ratio | 0.89 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 33.20 indicates that AAPL is fairly valued. By comparison, the P/E ratio for the NASDAQ 100 is 35.18.
The average analyst price target for AAPL is $287.22. It suggests decent upside potential, but downside risks are greater.
Apple Technical Analysis
Today’s AAPL Signal
- The AAPL D1 chart shows a price action inside a bearish price channel.
- It also shows price action below its ascending Fibonacci Retracement Fan.
- The Bull Bear Power Indicator is bearish with a descending trendline.
- The average bearish trading volumes are higher than the average bullish trading volumes.
- AAPL corrected more than the NASDAQ 100 Index, a significant bearish trading signal.
My AAPL Short Stock Trade
- AAPL Entry Level: Between $243.42 and $249.41
- AAPL Take Profit: Between $201.50 and $207.54
- AAPL Stop Loss: Between $261.82 and $266.95
- Risk/Reward Ratio: 2.28
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