Apple Stock Hovers Near Key Support Level, Signaling Potential Downside

Apple Inc.'s stock has faced a challenging start to 2025, falling 11% and underperforming the S&P 500 by a significant margin. This decline has brought shares within reach of the crucial 200-day moving average, a technical level that signals potential downside if breached.

200-Day Moving Average as a Key Indicator

The 200-day moving average represents a long-term trend indicator. When stocks approach this level, it can raise concerns about the strength of the uptrend. According to Todd Sohn of Strategas Securities, this level serves as a reference point for traders and a potential point of resistance.

Apple's Position in the Market

Until recently, Apple was the world's largest company by market capitalization. However, its recent decline has resulted in Nvidia surpassing it. While the performance of individual stocks does not always impact the broader market, Apple's size and prominence make it a stock to watch.

Concerns for the Bull Market

If Apple's decline intensifies, it could signal a concerning trend for the bull market, which is currently in its third year. Katie Stockton of Fairlead Strategies notes that while the S&P 500 has remained resilient amid Apple's struggles, further weakness in major technology stocks could pose a risk.

Technical Analysis and Potential Support Levels

Technical analysis suggests that Apple stock may continue to decline. Stockton predicts further downside potential and highlights the $208 level as a secondary support based on Ichimoku analysis. This level represents a potential point of stabilization for the correction.

Upcoming Earnings Report

Apple's quarterly earnings report scheduled for January 30 will be a major catalyst for its stock. Wall Street expects earnings per share of $2.35 on revenue of $124.2 billion. Strong earnings could provide support and lead to a rebound.

Traders' Perspective

Some traders may view the 200-day moving average as an opportunity to buy discounted shares. However, Sohn emphasizes that holding at this level hinges on Apple's ability to rally back to higher levels.