We’ve been bearish on this name for some time now and noted the following in our last post about it on October 6 when it stood at $658:
“…we view the technical set-up in the stock as being as precarious as it’s been in some time…Should [this] support give way its next support levels are at ~$525 and ~$425, some 20%-35% lower.”
With the stock down 20% from our original post and with a key support level (1) at hand, we would expect the name to mount some near-term bounce.
Should the stock’s new-found support give way once again we remain of the opinion that line (2), which runs along the stock’s 2003 and 2008/2009 lows at ~$425 will be the next logical downside target.
If line (2) gives way, expect line (3), which marks the lower end of an upward sloping channel of sorts which AAPL traded in from 2004 to early 2012, to be the next downside target.
Line (3) runs to ~$225-$250 and stands 50%-60% below current levels.
Long-term we remain of the opinion that AAPL will perform poorly for these reasons and that its all-time highs were registered a few months back when it crossed above $700.