An AAPL A Day Keeps The Margin Calls Away

America's favorite stock. You gotta love it.

The relative performance vs the rest of the stock market has been amazing. But where to now? What levels are we watching both to the upside and the downside?

Throughout the month of September, with the rest of the stock market struggling, $AAPL was making all-time highs. I'll say it again, All-time Highs. Highest prices ever. Ever.

But those new highs didn't last long. The quick reversal lower is the first sign of trouble ahead. Until $AAPL manages to get back above $405, the red flags are up. From False Moves, Come Fast Moves (in the opposite direction) - is what I've learned over the years. A lot of traders wait for breakouts in order to buy. If you were a buyer of this particular breakout, you have been proven wrong and are losing money. Shorts trying to pick tops are likely to have Buy Stop orders on any new highs. If you were one of those short sellers that were stopped out, you are upset because your trade idea was correct, but your timing was off. The Bearish Divergence in RSI doesn't make these participants feel better about themselves either.

If Apple manages to get back above $405 then none of this matters. But until it does, these things are important to keep in mind. As negative as all of this sounds, all I'm trying to do here is play a little devil's advocate. This is America's favorite stock for a reason. New highs on an absolute basis. New highs on a relative basis. You cannot argue with that, so the benefit of the doubt goes to the bulls here. Apple is an asset class of it's own.

But let's pretend for a minute that this stock can actually sell off and can actually have issues of its own. The $355-$360 level really is key support. Resistance there from earlier in the year, as well as support that held this summer makes this level an important point of reference. The rising 200 day moving average also comes into play making this both a nice entry point for those looking to get long, and a good area to watch to manage risk. Whether initiating stop losses below support, or keeping mental stop losses, this is the point of reference that we are watching closely.

To the upside, $405 is really my level. Back to back closes above this area, along with a healthier stock market, could make this price a good level to initiate or add to positions.

Oh yea, I think they have some kind of awesome new phone coming out.....

Disclosure: I own $AAPL stock in customer accounts