Apple on the Verge

Published on Monday, 21 December 2009 13:27 Written by Christian Paolinetti

New York, Dec 21^st (TradersHuddle.com) – Shares of Apple (NASDAQ:AAPL) were trading strongly to the upside by almost breaking the $200 level. Despite its recent weakness shares of Apple have been able to hold support above the 50 day moving average; however the stock has been unable to break free out of the cycle of low momentum.

Apple’s stock price entered a drifting dynamic as momentum buyers don’t want to touch the stock until it breaks the short term downtrend and value investors don’t want to enter because they feel they can get it lower, resulting in a down drift and overall profit taking cycle.

Today short term traders took advantage of the break of the 20 day moving average and took a short momentum trade towards $200, which has proven to be a very strong resistance level. Even if Apple breaks the $200, it still needs to deal with a big number of investors that bought above $200 after Apple’s two unsuccessful runs above $200.

Investors have been patiently awaiting a new breakout and new record high, but it never materialized, and with the price of being erratic at best it’s difficult to project a new high in the near term.