Apple's iPhone5 China Risk: Munster, Supplies, and the Coming Death-Cross

Apple Inc. (NASDAQ: AAPL) is supposed to be a winner based on the launch of the iPhone 5 in China sooner than expected. With a December 14 now confirmed, you would think that with hundreds of millions of cellphone users that this would generate an instant buzz and higher estimates for Apple revenues in this final quarter.

Not so fast… Gene Munster of Piper Jaffray is a perpetual Apple bull and he has a $900 price target on Apple. Munster put in a brief CNBC appearance this morning and said that he is looking for 45 million iPhone sales in the quarter. Where things get interesting is that Munster said he would like to raise his estimates by another 1 million or so units but he can’t do it because of the ongoing supply constraints that Apple has had delivering iPhone 5 units to retailers in the U.S. and in other markets.

About 16% or so of iPhone sales come out of China, so the numbers should be big. Unfortunately, Munster also brought up the issue that a launch with China Mobile Limited (NYSE: CHL) and its whopping 500 million subscribers is still likely to come at the end of 2013.

Apple shares are down 0.9% at $584.20 on the day after hitting a daily high of $588.40 and against a 52-week range of $377.68 to $705.07. What may be adding the biggest drag of all is that Apple’s stock chart is right back at a level of concern. The 200-day moving average as of Friday is up at $596.08 and the 200-day is acting as a serious overhang so far.

Another issue is that Apple shares probably a week or so away from a death-cross formation on the chart if this pulls back any further where the 50-day moving average would dip under the 200-day moving average. Obviously it is not an assured outcome that Apple will fall into the death-cross pattern, but it is a coming risk as the chart from Stockcharts.com shows.

JON C. OGG