Apple Broke Down - What do the Charts Say Now?
When Apple spiked above its 50 day moving average, we warned traders to curb their enthusiasm although consensus was turning positive. You might recall these pieces:
Specifically, we warned that a break below $420 was possible if recent chart patterns continue. This morning, Apple convincingly broke through that low and reached a low of $406.55. A major technical sell off is happening.
For Apple longs, this isn’t good news. The next weak level of support is found around $380 back in December of 2011. A stronger support level is found at $360 in November of 2011.
The chart paints a picture of a broken stock. Other than short term pivot points, the stock has no meaningful support until another $40 is shed from the price. From a technical perspective, this is not a buy on the dip name right now.
Disclosure: As of this writing Tim Parker is long Apple. (And licking his wounds)
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