Apple Shares Crash Into A Wall Of Resistance

Shares of Apple Inc. (NASDAQ:AAPL) are trading higher on a good earnings report, but the gains may be short-lived.

The $137 level has been critical resistance for the stock over the past nine months. Resistance is a large group of sellers who are all trying to get the same price. In this case, it’s $137.

At these levels, there is more supply than demand for the stock. That’s why rallies end when they reach them and sometimes stocks trend lower after they hit resistance.

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This is what has happened with Apple. Since September, each time the stock has traded close to $137, a sell-off followed.

If Apple can break through this important level and hold above it for a few days, it will mean the sellers have finished their orders. This will set the stage for another move higher.

If it can’t, there is a good chance that shares start to trend lower.