Apple Could Plummet Below $105 Because It's In 'No-Man's Land,' Expert Says
Brian Shannon thinks it’s possible for $105 to become a resistance level, instead of support.
Shannon is the founder of Alphatrends, in addition to being a full-time trader, educator and author of “Technical Analysis Using Multiple Timeframes.” He recently joined Benzinga’s #PreMarket Prep to talk about what might make shares of Apple Inc. (NASDAQ: AAPL) drop below $105.
First, he recapped the recent trading action, starting with the peak at $120, followed by a decline to the $105 level. The stock then bounced back up to $115, but Shannon explained it fell again, and the sellers took control at about the $112 level.
“But what we’re starting to look like is the sellers get more aggressive price-wise, not waiting for the rallies up to $115 or $112 to take control, and the tests of support are becoming more frequent at this $105 level,” he said.
Moving Back Up
For Apple to become more neutral in the intermediate term, Shannon thinks it needs to move above the $109 level and hold. To get back into positive territory, Shannon said it would really have to take out the most recent low or high at $113.
Shannon views Apple stock as being in “no-man’s land” at its current level; he said it could be setting up for a decline.
The Potential For Decline
Shannon emphasized examining the $105 level.
“If we break below there and hold below for a day or so, it seems likely that support we’re seeing in the $105 area will become resistance and the stock will decline further,” he said.
Check out his full interview here:
Don’t forget to tune in to Benzinga’s #PreMarket Prep broadcast Monday-Friday 8-9:45 a.m. ET for a live, interactive morning show with veteran traders and featured finance industry experts ready to answer your questions for the trading day.
Image credit: Jonathan Zufi, Wikimedia
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.