If Apple Shares Stay Under $500 For Long, Look Out Below!

Apple mobile/touch devicesApple Inc. (NASDAQ: AAPL) has been having its share of problems as a stock. If the reports of lower component and parts orders are true for the iPhone 5, then the reports of the PC transition from Gartner are not going to bode well. Today marked an unfortunate benchmark for the Apple bulls: Apple broke under $500 for the first time since mid-February of 2012. If things remain as they are, Apple could be headed for a 52-week low.

One thing which has to be considered here is that if you go back to early 2012, Apple shares rose from $400 to $500 in almost record time. Its stock closed out 2011 at $401.44 on a dividend-adjusted price and shares first hit $500 on February 13, 2012. Shares then went from $500 to $600 in another rapid measure as the stock hit $600.00 for the first time on March 15, 2012. The stock then took until September 18, 2012 to hit $700 for the first time and that peak-a-boo above $700 was the top that only lasted a few days.

With the stock currently at $504, things might not seem so bad. We have brought up one statistic all the way down that should be a stark reminder for investors about falling in love with a company and maintaining that love for too long. Apple's market cap is now about $475 billion since the stock has fallen so much. For Apple to go back to above $700 it will be a rally of about 39%. That translates to more than $185 billion in theoretical investor inflows into Apple alone.

If you look at the two-year Apple stock chart from stockcharts.com you will see that $500 to $510 has tried to be hard support for about 3 months now. If this level does not hold, there is really nothing but what technicians would refer to as "dead air" on the chart down to $425 to $450.

What could be a saving grace? A very positive earnings report next week that blows the doors off of estimates… Stay tuned.

AAPL chart 1 14

Filed under: 24/7 Wall St. Wire, Active Trader, Technical Analysis, Technology, Technology Companies Tagged: AAPL
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