I didn’t know what a “death cross” was when it comes to stocks, but it certainly doesn’t sound like the kind of thing investors clink glasses to celebrate.
In fact, it’s the point at which a stock’s 50-day moving average crosses below its 200-day moving average. It can reportedly be an accurate predictor of a bear market, a steep downward trend in the stock market. And Apple apparently is one of multiple stocks headed that way.
AAPL hit its high point of $232.07 in early October. Since then, it has entered a period of decline, alongside many FAANG stocks.
Part of the downturn appears to be pessimism about tech stocks in general. However, there are also Apple-specific reasons for the decline, such a concerns about falling iPhone demand. (I do my best to break down some of the reasons here.)
At time of writing, AAPL is trading at around $155, giving Apple a market cap of 742.133 billion.
“Apple has gone lower than I thought it would,” Bill Baruch, president of Blue Line Futures, told CNBC. “You’re getting a death cross. It’s one of the many different stocks out there that are seeing a death cross.” Baruch said Apple’s downside could be around $144. That would push Apple down 15 percent for the year.
Of course, it’s worth pointing that — despite its gloomy name — “death cross” doesn’t suggest a point of no return or anything like that. Companies (including, recently, Facebook) have rallied after a death cross. Apple’s last death cross took place on August 25, 2015, when the stock closed at $109.69. That was down 17.5 percent from its $133 peak in February 2015.
Nonetheless, it’s not exactly a great landmark event for Apple, which just a few months back was celebrating passing a $1 trillion valuation.