Apple Broke Support

Published on Thursday, 08 November 2012 05:44 Written by TradersHuddle Wire

New York, November 8th (TradersHuddle.com) - Shares of Apple, Inc. (NASDAQ:AAPL) closed the trading session at $558.00 below calculated support at $574.75. The stock broke long setups, prompting the bulls to worry that this move might give the bears the upper hand.

Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets personal computers, tablet computers, mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, and a variety of distribution channels. Apple through its ITunes store sells third party music and video content, its applications store sells Apple's own and third party software applications for its iPhone iPad, and iPod products.

Apple's stock was trading in a well defined range with support at $574.75 and resistance at $703.99; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $574.75 will remain in focus as Apple's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in Apple can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $574.75. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.