Apple shares price have come down from around $700 to $527 approximately. The reason ins’t clear perhaps. But what is happening it could be that:
Some one has sold a big stake and has brought down the share price, by consequence, fund managers have take notice and as a precaution are selling.
Next, astute investor will follow the trend and will start selling. Then the bearish traders will start shorting, putting more pressure on the downtrend. Then, the stock holders with not so much cash will get a margin call and their positions will be closed out, that is just before the stock hits a bunch of stop loss orders.
By then, the trend will be completely bearish and a new wave of trader, FM and so on, will start betting that the stock will continue to slide down before it reaches the bottom. By then, apple share price should be worth around $250 a share.
Now, if you have been follow the news you might have notice a couple of thing recently:
1- The press and the market, question Apple’s ability to continue Steve Jobs amazing work. Will his vision keep on as a legacy or will become history.
2-Blackberry was recently promoting their new smart phone. For those who have seen the highlights, will surely think that it has lots of potential to become a big player again in the smart phone market. And very possible, it will be Iphone direct competition.
With this in mind, why would you hold on to Apple stock. Wouldn’t it be better to buy the under achiever of Blackberry and profit when the new smart phone hits the market?
Apple chart looks like having a massive double top. A double top of such dimension will scare anyone. A double top often signals the end of a bull market. Double tops usually end the pattern around the same price where it started. Many traders will also think, that the price will most likely break beyond the base of the double top, like this, confirming the bearish signal, which will prompt a new round of selling.