Apple and Microsoft: Technical Analysis and Price Forecast

Apple and Microsoft Forecasts Video for 26.01.24 by Bruce Powers

Apple Inc. (AAPL)

From a technical perspective Apple stock has led the major indices as it broke out to new highs in June of last year. The indices have only recently made new highs. A new record high for Apple was reached in July at $198.23. A retracement to test support around the 200-Day MA followed in October.

Then again it was tested twice as support this month thereby setting up a double bottom reversal pattern. The subsequent rally off the lows started with an enthusiastic upside gap. Apple stock has since rallied to a high of $196.38 as of Wednesday, where it looks like it might encounter some resistance.

Apple Earnings on February 1

Apple reports 1Q earnings on Thursday, February 1. The company just had their first weekend of pre orders for their new Apple Vision Pro headsets priced at $3,499. There are reports that pre orders have sold out. Depending on whether demand stays strong, the long-term potential is a new product revenue stream for the company.

Apple Has Reached a Possible Resistance Zone

Given Wednesday’s price action Apple stock is at risk of a pullback or consolidation. It completed a 78.6% Fibonacci retracement on Monday and made a slightly higher high on Wednesday before closing weak, near the low of the day. A pullback to at least the 38.2% Fibonacci retracement at $190.24 would not be surprising as the 50-Day MA is close by at $190.53. Nevertheless, a new high target is at $204.91, That is a 127.2% Fibonacci extension of the most recent correction.

Microsoft Corp. (MSFT)

The stock of Microsoft was a market leader last year as well, and it remains so for the start of 2024. However, it may be ready for a pullback soon. On Wednesday, it reached a high of $405.63 and a new high market capitalization of $3 trillion dollars before pulling back. They are the second company to do so after Apple Corp. However, the high was almost an exact match with the completion of a 200% extension of the most recent retracement. In addition, several other Fibonacci targets levels are around that price increasing the chance to see signs of resistance as selling pressure builds. Wednesday closed weak with a possible bearish shooting candlestick pattern.

Microsoft is a Leader in the AI Revolution

Through its partnership with artificial intelligence (AI) company OpenAI, the maker of ChatGPT, Microsoft is at the forefront of the AI revolution. It has established itself as a leader in the sector with that partnership. Microsoft is scheduled to report earnings on January 30.

Retracement May Test 20-Day Moving Average Support

The most recent breakout level for Microsoft stock was $384.30. It corresponds to potential support around the 61.8% retracement of the most recent upswing at 381.86 and the 20-Day MA at $382.69. Microsoft stock broke out above the 20-Day line three weeks ago and it has not yet been tested as support. You can see how much of the month of December the 20-Day MA marked resistance. It would be healthy for the uptrend if the 20-Day line is tested as support. This does not mean it will be if a retracement kicks in, but it could.