Apple Stock Selling: Apple appears to be the most oversold in years following a $200 billion selloff.
Shares of the iPhone maker are down 14% from recent highs and are down 12% this year. This compares to a 7.42% gain for the Nasdaq 100 index. Apple’s stock price fell due to concerns about iPhone sales in China and fines from the European Union (EU).
The stock fell 0.3% on Wednesday, recording its sixth consecutive negative session. It fell 7.2% compared to the six-day decline, wiping out more than $200 billion in market capitalization.
“At some point, this hatred will become too much, and after six years of mostly overselling, it seems like a good place to start,” Michael Toomey, head of TMT trading at Jefferies LLC, wrote in a note to clients.
He said the stock’s continued underperformance relative to the Nasdaq 100 was noteworthy, adding, “It feels like we get another negative AAPL data point every day, and it’s not particularly cheap.”
Jefferies looked at an index of the relative strength of Apple long and short positions in the Invesco QQQ Trust Series 1, an exchange-traded fund that tracks the Nasdaq 100. Based on this, “This is the most oversold AAPL/QQQ since the early days. 2018.”
Bespoke Investment Group LLC wrote in a post to
Despite recent share price weakness, Apple stock trades at nearly 25 times projected earnings, exceeding its 10-year average multiple of 19.
Despite the sell-off, options traders are showing few signs of fear, buoyed by broad optimism about the biggest technology stocks.
Implied volatility for three-month options has risen from recent lows but has been in the mid-range for the past year. And put skewness, which measures the premium investors will pay for downside protection, is near its lowest level in two years.
