AAPL At A Crossroad

Two weeks ago AAPL broke below 391 and it was trying to hold the 100 SMA for support. After a brief chop near the 100 SMA, it has broken down and dropped to the 200 SMA near the 363 level. AAPL is currently at a crossroad, it is sitting on a supporting trendline that is confluence with the current 200 SMA level (blue line), and this could potentially provide a short term bounce or a level for reversal. In order for the trend to reverse, AAPL needs to move back above the level near 378 (horizontal blue line). But looking at the 354-360 S/R (support/resistance) zone and the long support trendline from the March 2009 low, it is most likely the algor computers and the technical traders are waiting for AAPL to break below the 200 SMA and hit the long term support trendline near 354. If AAPL doesn’t set off a reversal near 354, then 325 is the next potential level for support. Until then, staying on the sideline and watching AAPL price action is probably the most prudent thing to do.

(click on the chart to get a larger view)