Apple – Tough times ahead?
Apple has finally broke the $400 magnet that has held the stock for the past month. Unfortunately for the longs, the magnet was broken to the downside. This is a key technical break-down for the stock.
Analyzing the trades from the past few weeks. The stock has been trading in a tighter and tighter range as the 400 area has had a vice-grip on the stock. 400 was a key psychological area that many traders had positioned off of. Some traders bullish, some traders bearish. This battle between the bulls and the bears has gone on since October 19th, the day after the earnings release.
It has taken a few weeks, but it appears that the bears have won this battle. The stock finally broke down through its key 391 support area, and has traded as low as 383 today. I would expect that rallies in this stock may now be met with stiff resistance as traders who are caught long off the 400 area, try to wiggle themselves out.
There is some minor support in the mid 370s, but the next major support area is down at 360. It would not surprise me if that level is tested within the next couple of weeks.
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