Apple Needs Good News From WWDC To Match Price Momentum

Peter Hafez - Chief Data Scientist - RavenPack | June 08, 2015

Apple’s Worldwide Developers Conference kicks off in San Francisco Monday and it’ll be keenly watched by Apple fans and analysts alike for new product launches and enhancements.

Positive news is definitely needed by Apple because sentiment momentum has lagged price over the last month or so.

Figure 1 below shows the relative strength indicators (RSI) of Apple’s sentiment, derived from RavenPack News Analytics, against price RSIs. As you can see, shorter-term price momentum spiked into overbought territory late May and this wasn’t fully supported by a run higher in sentiment strength. That short-term move in price momentum is reflected in the longer-term price momentum edging higher. But there’s no corresponding move in sentiment.

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So, if our simple bit of analysis is to be believed, either Apple has to deliver a bunch of good news, or price momentum has to fall.

So what will Apple announce? According to Business Insider , the possible announcements are: a streaming music service, software updates for iPhones, iPads and Macs, and perhaps an update on “HomeKit” - a single app to control all the devices in the home.

Update June 9 2015. No Improvement After WWDC Keynote

Apple may have had its biggest news day yesterday since the iPhone and Apple Pay launch in September 2014, and a slight decline in share price on the day, but the gap between 90-day price and sentiment momentum has widened further (see Figure 2). Note, however, short-term price momentum has fallen significantly.

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The sentiment Relative Strength Indicators are produced by finding the novelty-weighted sum of all event sentiment concerning the company each day and then calculating traditional 14-day and 90-day RSIs of this sum.

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