Apple has dropped… now what?

Let's start your week with a breakdown

How's it going? It was a tough week for AAPL, which dropped almost 5% and lost its designation as the world's most valuable company (for a while at least) to Saudi Aramco, the Saudi Arabian oil company. Furthermore, AAPL just fell below a lot of major support areas.

We had a bounce on Friday, but a lot of people are thinking that this bounce won't last. Are they right? Well, as you can see, it dropped down right below the $140 level, which breaks the low it set all the way back in October, not even pictured on our chart above. The bounce was pretty big, so there are those who think it's a short term bottom, too. I believe the $150 level will be our over/under level to decide whether this bounce actually turns into a real bottom, or whether AAPL rolls back over and forms a new low. If we come up to $150 and reject it, I think that's a really bearish sign. I think if that happens, the next low could be as low as $135, our next major support area below. If we recapture $150 and stay above it, I think we'll move pretty quickly to $160.

As we expand out our focus, AAPL has been pretty bearish for five or six weeks, the weekly MACD has been bearish, as has momentum. The bounce we saw on Friday is really important. Now we just need to see if it turns into a sustained bounce higher, or if it's a false start and we begin to move lower still. I'll keep you posted, but watch that $150 level. That's the key! Trade safe, Micah Lamar P.S.: If AAPL recaptures $150, like I said, I think a move higher would be imminent. If you want to see how I'd trade that move, watch this presentation on what I call the Perfect Apple Trade.

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