On December 1oth, a bearish case was laid out for AAPL (Apple Inc) in the AAPL Looking Increasingly Bearish post.  Since that post nearly one month ago today, AAPL did indeed sell-off and then bounced but failed to exceed the early December highs.  Among the bearish arguments for the stock at that time were:

  • A failure on the recent attempt to take out the December 3, 2012 high (which it has yet to do).
  • Reversal at the 61.8% Fibonacci retracement of it’s Sept 2012- April 2013 bear market which nearly cut the stock in half.
  • Significant divergences in place with prices making higher highs while most indicators and oscillators were making lower highs.
  • Chaikin Money Flows about to turn negative (and have since done so & the CMF remains solidly in negative territory).
  • Extreme overbought reading clusters which have historically lead to corrections in the stock (and so far, have once again).

That previous discussion on AAPL was posted while the stock was mere basis points from it’s 52-week high and while prices were at the top of a bullish falling wedge pattern.  Since then, prices have moved lower and as this updated AAPL daily chart below illustrates, AAPL has broken below the bottom of the falling wedge as well as the alternative (dashed) uptrend line which was added to the AAPL live chart shortly after that previous post.  With the broad market still solidly entrenched in an uptrend (all trend indicators remain bullish at this time), I still don’t have an interest in shorting AAPL.  However, with AAPL continually leap-frogging with XOM for the title as the world’s largest publicly traded company (and a stock most likely owned either directly or indirectly by anyone reading this), it is worth pointing out that AAPL may have only just begun it’s decent.

AAPL daily Jan 9th

The following chart shows the AVSPY (AAPL vs. SPY ratio) chart with the AAPL stock price plotted in the upper-most window.  As this chart illustrates, breaks above/below the primary trendlines in the AAPL/SPY ratio have come very early in the last couple of primary trend reversal in the stock.  Maybe this time will be different, maybe not.  Just something to keep an eye on for now, especially with that most recent uptrend line break in the stock.

AAPL vs SPY ratio chart

AAPL vs. SPY ratio, Jan 9th