Is There Any End in Sight For Apple Inc.'s (AAPL) Losing Streak?

Apple Inc. (AAPL) is on track for a seventh consecutive daily loss

Apr 29, 2016 at 2:37 PM
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Apple Inc. (NASDAQ:AAPL) is currently on track for its seventh straight daily loss, down 1.4% at $93.53. Historically speaking, AAPL hasn't suffered a longer losing streak since 1998. What's more, over the past seven sessions, the tech stock has surrendered 12.7% of its value, due in large part to a post-earnings bear gap on Wednesday.

The chart below, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, documents other similar losing streaks. White looked all the way back to 1997, when Steve Jobs returned to his role as CEO, leading to years of product innovation and accompanying technical success. As you can see, AAPL's current 12.7% deficit is the second-worst return it's suffered over cold spells of seven sessions or more.

aapl losing streak 1

What happens after similar losing streaks? Well, as the charts below make clear in summary form, AAPL tends to outperform over the short term. On average, the shares have gained 2.1% in the session following long losing streaks, compared to an average return of 0.2%. They've also been positive five of six times. Going out one month, AAPL has averaged an 11.8% gain and been positive every time, besting the respective anytime numbers of 3.3% and 60.1%.

aapl losing streak 2

Of course, this hardly guarantees that AAPL is on the verge of a rally. This is especially true because of the extreme optimism that's built up on Wall Street, where 25 of 31 analysts still rate the stock a "buy" or better -- leaving it vulnerable to future downgrades. In fact, a number of signs are pointing to a potentially major shift in sentiment, not the least of which was yesterday's big revelation from Carl Icahn.

Finally, if you're hungry for more info, White provided two more charts below. Here, he accounts for Apple Inc. (NASDAQ:AAPL) losing streaks of "only" five days and up, yielding a much more robust data set. As you can see, the aforementioned trend of short-term AAPL outperformance after cold spells is echoed.

aapl losing streak 3


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