Apple [NASDAQ:AAPL] said on Monday that its latest iPhones, the 6s and 6s Plus, are on pace to exceed last year's first-weekend sales of 10 million units, citing exceptionally strong initial orders. The company said the iPhone 6S Plus had already sold out online, with demand particularly strong in China. The latest iPhones, which start shipping on September 25, have upgraded cameras, faster processors and a second-generation Touch ID fingerprint sensor. 

In addition to Multi-Touch gestures like tap, swipe, and pinch, Apple also is introducing a new feature on the iPhone called 3D Touch, which allows a user to manipulate the phone in different ways depending on how hard they press. The new feature, Peek and Pop, lets users preview content, Peek, by lightly pressing on the screen and act on it by pressing a little deeper to Pop into it, without having to actually open it. 

According to comScore, Apple continues to increase its lead in U.S. smartphone market share with 44.2% market share over Samsung, LG, Motorola, HTC and other handset makers, before the launch of the iPhone 6s and iPhone 6s Plus.

In November, Apple will start shipping a new iPad Pro with shipments to be between 2.5-3 million units in the fourth quarter of 2015, according to Digitimes Research. Apple iPad Pro will compete against the Microsoft [NASDAQ:MSFT] Surface Pro 3 tablet, with a new Surface Pro 4 set to launch in early October. Microsoft reported Surface sales of about $900 million in fiscal fourth quarter 2015 and $3.6 billion for its fiscal year. We expect that Microsoft will lose some of that revenue due to competition from the iPad Pro.

Apple shares were under selling pressure since the middle of July, after the company reported revenues and earnings that beat Wall Street’s expectations but with sales of iPhones that came in below estimates. Apple also gave its revenue forecast for their fiscal fourth quarter 2015 that was below consensus estimates. 

Sell-side analysts based their thesis on the argument that Apple iPhone sales in China could be at risk if China’s consumer sentiment was dragged down along with the Shanghai composite index, which continues to pull back sharply from its high in early-June. Millions of small investors who bet on China’s stock markets are now losing real money and could shy away from expensive items, such as iPhones.

In late July, we suggested that there was a downside risk that AAPL could drop to between the $115 and $105 levels, if the stock broke down through the 200-day SMA. Since then, AAPL broke down through the 200-day SMA and plunged to $92 a share in late August, along with the major U.S. indexes, following China's benchmark Shanghai Composite index 8.46% meltdown. The stock is on the rebound with technical resistances at $118.25 and $120 a share. 

Disclosure: Portfolio holds long position in AAPL. No position in MSFT or any other companies mentioned.