The following (green text) is an excerpt from our October 9th Asbury Alert entitled Near Term Peak In AAPL? Asbury Research subscribers can view the entire report by logging into our Research Center.
Asbury Alerts, one of 8 different reports that Asbury Research produces for subscribers at various intervals throughout the month, are actionable reports that provide tactical entry and exit levels that pertain to our larger, more strategic investment themes and ideas.
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Excerpt from our October 9th Asbury Alert
Title: Near Term Peak In AAPL?
In Chart 1 of Monday’s (October 8th) Keys To This Week report we pointed out that Apple (AAPL) was positioned right on top of minor support at $657 to $644 and said that a breakdown below it would clear the way for more near term weakness and a test of the next support level at $620.
The chart below, which is an updated version of Monday’s chart, shows that $657 to $644 support was appreciably broken yesterday as AAPL traded as low as $636 intraday and closed at $638.
This near term breakdown in AAPL, which we stated on Monday is one of three things that have to happen this week to keep downside pressure on the market:
- clears the way for a test of the next underlying support level at $625 to $620, which represents the May 18th uptrend line and the July 10th benchmark high (green highlights), and
- targets an eventual decline to at least $605, which will remain valid as long as AAPL remains below $674
AAPL met our $605 target on October 26th to capture a $31 per share, 5% decline in a little over 2 weeks, but is now positioned at what we believe is a major decision point for the stock.
At 5% of the S&P 500 and 20% of the market-leading NASDAQ 100 in terms of market cap. APPL’s ability — or inability — to recover from here will be seen as a coincident if not leading indication of what to potentially expect from the US broad market for the rest of 2012.
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