How to Play This Apple Decline

Apple (AAPL) has declined in recent sessions. Your view of this decline will likely be colored by your entry level if you are long AAPL. If you went long AAPL back in August through November in the $110-$105 area you probably view the recent drop in price as a pullback or even a buying opportunity. But if you bought AAPL in the last consolidation in the $145-$140 area you may be nervous. If you bought AAPL around $155 as it stalled you are underwater and perhaps wringing your hands and checking the latest price every 15 minutes. Trade location matters.

Let's try to be more detached and academic as we look at the latest charts and indicators. In this daily bar chart of AAPL, below, we can see that prices broke below the now flattening 50-day moving average line. The last time that AAPL broke below the 50-day line was in November and it stayed below the line for about five weeks. AAPL is still above the rising 200-day moving average line. (Apple is a holding in Jim Cramer's charitable trust, Action Alerts PLUS.)...303 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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