Wednesday, November 9, 2011

Apple Rotting?

AAPL stock has had a tough time attracting buyers above the 400 dollar level since it first got to it back on July 22nd. Since then it has closed above 400 on ONLY 21 days out of 77 trading days. Granted we have been in a pretty strong selling mode since early August but this just shows there is a lack of buyer interest at these high levels.

The earnings gap from mid October left a bearish island reversal top in place at the 426 high and AAPL has been struggling to hold the 400 level once again as it bear flags on top of the 50MA. This could be a pretty big turning point for the stock that has been so loved by Wall Street for so long.

AAPL is breaking hard with the market today and I think it has a date with the 389 open gap from Oct 10th. Below that there is little support at the uptrend line of the larger scale rising wedge near 375. The 200 MA is down at 362 and could be where AAPL is headed if it cannot get its act together and get back above 410 and attack that island gap top.

Looking at the volume profile on AAPL you can see the 1 year VPOC (volume point of control) or where the most volume has traded, is down at 346 so that is huge support if it ever goes there. But the thing to keep in mind is there is a decent volume pocket between 355-385.

Buying Dec puts on bounces is not a bad idea and then selling weekly's against them is a decent way to play a choppy to down move over the intermediate term.

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