(By Rich Bieglmeier) If you don't already know, the Wall Street Journal is reporting that Apple (AAPL) cut iPhone parts orders because "demand is about half" of what the tech giant expected for the current quarter. If you don't already know, the stock is under pressure today.
Today's selloff could be a significant turning point for AAPL shares. As you can see on the chart below, the smartphone and tablet giant's shares broke a key support level, and it could get real ugly for the stock.
A few weeks ago, iStock discussed a Sundal Collier analyst's sell recommendation and $400 price target for Apple. We examined the NASDAQ 100 member's past valuations and what it would take to get $400. In a nutshell, past valuations showed that it was possible for AAPL shareholders to see $400. Of course, we took some heat from iAddicts, but that's OK.
Today, we are going to look at the technical side of AAPL. With today's $20 markdown, the stock pierced major support, and now rest on the psychological $500 price-tag. However, we expect traders won't be too hung up on round numbers for long.
iStock sees a nasty pattern for Apple's shares. The stock's recent closing low was $509.59 on December 28, 2012 with a bunch of closing prices in the upper teens and 20s. The cluster of similar closes sets the bottom bar which is fairly straight edged. However, the top edge of Apple's price pattern continues to decline.
What we have here is a bearish right angle triangle, and today's selloff is the sell signal. Here is the good news; there is a dash of support around five bills. After that, timbeeeerrrrrr, $450 here we come. If $450 doesn't hold, then $425 is up next. And, if $425 goes bye-bye, then the $400 analyst, Per Lindberg will go from fool to genius, almost overnight!
Investors will be updated in full when Apple reports 1st quarter earnings on January 23rd. As we wrote before, the school is out as to how well iPhones sold during the holiday quarter. Between here and there, the question is how low will Apple (AAPL) go?