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Shares of Apple Inc (NASDAQ: AAPL) Not Responding Well to Rally

|Includes: Apple Inc. (AAPL)

February 25, 2010

Shares of Apple Inc (NASDAQ: AAPL) remain mired in lower to sideways trading since the company’s recent announcement of their highly anticipated tablet device, the new Apple iPad as well as their last quarterly earnings report that posted a huge, better than expected, increase.

Based on the news and earnings, we would expect Apple to be at new rally highs. They are well below their highs, closing Wednesday at $200.66 a share.

Some chart patterns that are of concern are:

Apple shares look like they have had a bearish double top on January 5 and January 19. They did bounce off the $192 level in early February, a level that also held declines back in December 2009. This creates a strong support level. But that bearish double top is worrisome.

Apple shares have broken below a rising trend support line that has held all declines since May 14, 2009. They remain below this support line.

Apple has a huge a loyal following of investors and users. But it will still respond to a bearish close below $192 a share, the February lows, as short sellers have no mercy. Traders should watch this level.

If Apple can close decisively above $205.88 a share, the 61.8% retracement of its January to February decline, it should make a run for its prior $215 highs. But watch that $192 level.



Disclosure: No positions