Although I recommended a sell of Apple (AAPL) at $572 late last year, I find it interesting that the institutions continue to sell it aggressively after the New Year. AAPL was not a great performing stock in 2013, although it did rebound nicely, and some funds could have decided to hold back on buying AAPL at the end of 2013 as a result. This is called window dressing as most of us know, but when that happens the opposite tends to happen as well when the next quarter (or New Year) begins. Interestingly, though, that is not happening.
Today, we are seeing AAPL take it on the chin while the rest of the Market appears resilient. Clearly the big boys are still not interested in buying it, but there may also be a reason for that. The sell signals I identified at $572 were clear, but AAPL has not yet fallen to test the longer term support level in the real time AAPL report offered by Stock Traders Daily, so if institutions are seeing the same support they are prudently choosing to wait. The stock is on its way, but it still has more to fall before a test becomes official. Please note, as time goes by support levels of upward sloping channels increase.
Our analysis suggests that AAPL could bounce on a near term basis (next few days) if it holds the $542 level, but that is only midterm support. Buyers interested in it for the longer term should wait until longer term support is tested, and at that point short sellers who initiated positions near $572 should also cover.