Bird's Eye View: Apple Inc. (AAPL)

With the overall market currently in a tizzy and moving lower, retail traders often get scared or wildly bearish even if just a few days ago they couldn't be more certain that their holdings were moving in the direction they wanted. At a time like this it's a prudent, logical, measured, and smart thing to review your holdings from a bird's eye view. Where are the major support levels? What are the moving averages doing? Is the stock's volume telling me something? Should I exit my position and buy it back at a better time? I should note that all traders should already have asked and answered all of these questions before entering into their positions in the first place, so as to not be reactionary…alas if you did not do that, its time for some reevaluation. Let's take a look at a widely held, such as Apple Inc. AAPL… Apple has been trending higher for the past twelve months and the 50-day and 200-day moving averages reflect that (both upward-trending). Over the near-term however, shares have found resistance at the $319-321 level twice and are now moving lower. This is reflected in the 18-day moving average, which has tipped negative. First support is at the 50-day ($296.43), followed by the recent resistance-come-support level of $280.00. Below that, the 200-day moving average comes into play around $259.00, followed by horizontal support at $250.00. Furthermore, the Slow Stochastic is nearing oversold territory, indicating that initiating a short position or selling longs at this point is likely too late. As for volume, looking at a yearly chart will show that Apple likes to make a sharp bottom on volume higher than 50 million shares on a daily basis. We have not seen that type of action lately; this likely indicates that major institutions are not willing to step in and put a floor under the stock just yet. Conclusion: Apple Inc. looks like it could have a bit more downside to go, though likely less than 9%, as $275.00 should be a huge support level. Furthermore, if you have been holding your longs, you just might have to stomach to rest of the move lower before shares tick higher. Or, for those knowledgeable about options, a 1x2 put spread would fit the bill nicely for further protection on a long position.