Apple shares gain for a second straight session on Wednesday, Q1 production plan for new iPhone models reduced by 10%, Nikkei reports

According to a report by Nikkei Asian Review on Wednesday, planned production for Apple Incs (AAPL) latest iPhone models for the first quarter has been cut by about 10%.

The news followed warnings by suppliers such as Samsung Electronics Co Ltd and Skyworks Solutions Inc about weak Q1 demand for smart phone chips.

Apple shares closed higher for a second consecutive trading session on NASDAQ on Wednesday. The stock went up 1.70% ($2.56) to $153.31, after touching an intraday high at $154.48, or a price level not seen since January 2nd ($158.85).

Shares of Apple Inc have retreated 2.81% so far in 2019 compared with a 3.12% gain for the benchmark index, S&P 500 (SPX).

In 2018, Apple’s stock went down 6.79%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

According to Nikkei Asian Review, citing a person with knowledge of the matter, total planned production volume of both old and new iPhone models will probably be reduced to a range of 40-43 million units during the January-March quarter. A previous forecast had pointed to a production volume of 47-48 million units.

In late December, Apple requested that its suppliers manufacture fewer-than-planned units of iPhone XS, iPhone XS Max and iPhone XR after which the tech company cut its quarterly sales forecast during the week ended on January 6th, thus, signaling slowing demand for its devices in the largest smart phone market globally – China.

The tech giants iPhone suppliers include Hon Hai Precision Industry Co Ltd (also known as Foxconn) and Pegatron Corp of Taiwan.

Meanwhile, estimates by market research company Canalys pointed to a 12% drop in smart phone sales in China in 2018. The firm also projects another 3% decrease in smart phone shipments during the current year to below 400 million units for the first time in at least five years.

In late December, Citi Research revised down its first-quarter production forecasts for Apple Inc’s latest iPhone models, as projection for the priciest iPhone XS Max was cut by 48% due to weak demand.

Last month TF International Securities also lowered its first-quarter iPhone shipment forecast by 20%.

According to CNN Money, the 33 analysts, offering 12-month forecasts regarding Apple Inc’s stock price, have a median target of $215.00, with a high estimate of $300.00 and a low estimate of $165.00. The median estimate represents a 40.24% upside compared to the closing price of $153.31 on January 9th.

The same media also reported that 20 out of 42 surveyed investment analysts had rated Apple Inc’s stock as “Buy”, while 18 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Apple Inc (AAPL) are presented as follows:

Central Pivot Point – $149.87
R1 – $157.75
R2 – $167.23
R3 – $175.11
R4 – $182.98

S1 – $140.39
S2 – $132.51
S3 – $123.03
S4 – $113.54