AAPL Pulls Back for a Potential Buy

Apr 14, 2008: 10:23 PM CST

Apple Inc (AAPL) – from a technical analysis standpoint – may be retracing enough for a potential buy signal, as I had highlighted previously.

Earlier in my post “Apple Continues its Ascension,” I hinted that APPL could be a potential buy if it were to pull back to the $140 area into moving average support. I also highlighted that this development (the pullback) was increasingly likely due to the extended price swing to the upside.

Now that price is coming up on the ‘buy zone,’ aggressive traders may want to watch this stock closer for potential opportunities. I would project support to be coming in from three sources:

The rising 20 period moving average
The flattening 50 period moving average
The 38.2% Fibonacci retracement (just above $142)

If you do decide to take a long (buy) swing-trade in AAPL, I would suggest that you stop be placed beneath $140 or perhaps as low as $135.

The Weekly chart also confirms these potential areas of support:

As always, if you feel this may be a good opportunity, but don’t feel you can purchase a $140 stock, consider using potential options strategies if you have used them in the past. Otherwise, you may try this trade in a demo or practice account.

(Disclaimer: I have no position in APPL stock)

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