I last wrote about AAPL last month see here: http://www.safehaven.com/article/23038/market-report-target-achieved
We had a $430 target which was just missed by a few dollars; however the point of this article to bring up to date a potential serious situation in this stock that could have serious repercussions on the stock markets in general.
As I write this article AAPL is sitting right on its 200DMA, and a long term trend channel, that has held this uptrend for the best part of nearly 2 years, the set up is ready to break and I suspect there is going to be a lot of sell stops sitting right under this area.
Most technicians will see this support area; I see this as a very important area as well, but from a totally different angle to conventional technical analysis.
From the lows made back in Jan 2009, there is a 5 wave advance, the technical's into that last major swing high were diverging, this was even before the late Steve Jobs passed away.
But I can't help thinking that a part of AAPL has been lost forever with the passing of Steve Jobs, in fact AAPL imo was Steve Jobs. So unless you can find someone to take the company forward in the same direction I really do think there is a high probability that the best of AAPL is behind us.
I am not much of a fundamentals guy, I don't even understand most of the stuff that gets said by the likes of CNBC, I am believer of people create price which is reflected by the waves that are made by people's feelings towards buying and selling at points in time.
Even with excellent earnings results, I have seen price in quality companies head lower with the rest of the markets, simply put the market goes lower if more sellers than buyers.
You can lie and cheat on companies account balance sheets; you can't lie and cheat with price.
When you look at the decline from the last swing high, it got a clear 3 wave decline, but we are at a point that this stock needs to find buyers to step up and raise their game.
If you look back earlier this year, you can see the move into the Oct lows was held by the 200DMA and held the trend channel support.
You can see the 200DMA has held this up trend on 4 separate occasions, and now we are back to test it again, so this is an very important time for this stock and I fear for the US stock markets in general.
If the big cap stocks start peeling away, you will see the markets head lower, simply because of the weighting, with stocks such AMZN, GOOG & AAPL having a large percentage of the weighting in the NDX if pays to watch these large tech stocks.
In fact I simply can't look at the NDX without looking AAPL as it plays a huge part in my work.
So if you are bullish this stock or even still long, I strongly suggest watching this area of support, as if it breaks and can't find support, I think we are potentially on the cusp of an avalanche as the market will likely trigger sell stops as I think this area is where a bunch of important sell stops are sitting.
Until next time.
Have a profitable week ahead.