Apple (NASDAQ:AAPL) led a tech drop this week, with the iPhone maker finishing down more than 3.5 percent over the past 5 trading days. While it has held its place as one of the best performing tech stocks of the year, Apple is now down 10.29 percent since its peak of $705.10 on September 19 and has lost most of its gains from the launch of the iPhone 5.
While investors will not fully fathom the market reception of the new smartphone until Apple reports financial results for its fourth fiscal quarter on October 25, at least one analyst was certain the stock was likely to keep dropping in the near future.
“This breakdown is certainly not constructive in the short run,” Greywolf Equity Partners tech analyst Mark Newton told The Wall Street Journal on Monday. “While the near-term pattern has gotten worse, the longer-term trend is still very much intact.”
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Apple announced after the opening weekend of sales of the iPhone 5 that it had sold more than 5 million units of the new device in the first three days. However, most watchers and experts were disappointed by the figure. It was eventually revealed that the company had been facing severe supply constraints for the device.
The company has also been receiving widespread criticism for its new in-house mapping app that replaced Google’s (NASDAQ:GOOG) program in Apple’s mobile devices. Chief executive Tim Cook was eventually forced to issue a public apology for the app and promise to users that improvements were on their way. Some worries have also been expressed about recent reports of labor unrest at Apple assembler Foxconn.
While Newton blamed the “head-and-shoulders pattern” for the stock slip, he asserted that the trend was not likely to affect Apple’s long-term view and predicted the company could climb as high as $740 to $765 over the next four-to-six months.
“One should look to buy dips for a move back to challenge recent highs,” Newton told The WSJ. “Any statement on a bigger topping process is somewhat premature and this will take some time before peaking out. For now, pullbacks should offer decent trading opportunities for aggressive traders.”
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