The big Apple (stock) is the most widely watched name on the planet. Interest never wanes as we eagerly await the next product or gadget. The new iPhone 6 seems to be setting sales records daily and is probably the hottest tech product for the holidays. As a result, the stock moved out to new heights recently (near $120), but it was due for a rest and indeed, an 8% correction kicked in.
That may make some investors nervous of course, but as we see in the chart below, the stock only came back to test the lower bollinger band, which has been tightening as the stock consolidates and builds a high level base. There is absolutely nothing wrong with some selling here; in fact, selling likely resets the stock for a move higher (see the circles, marking how that has worked on three prior occasions this year). The recent MACD crossover shown here was a signal that a modest pullback was imminent.
I think what is bothersome to traders is the speed of the move downward. It is always unnerving when you’re on the wrong side of the move. However, the action on 12/9 was significant – we saw higher volume than the previous five sessions, a bounce off the lower band, and a close at the highs of the session. With the holidays approaching and the likelihood that sales numbers will be disclosed, Apple could really start to move here.