Google, Apple May Break Your Heart

There are over 7,000 stocks listed on the U.S. exchanges, but only a handful seem to capture everyone's attention from day to day. A few of these highly popular equities, like Apple (AAPL - Cramer's Take - Stockpickr), are so widely held that fortunes are made and lost every time the stock wiggles a few points in either direction.

The recent selloff has induced seismic shifts in these household names, triggering sleepless nights and second-guessing by the folks that loaded up on long-side positions during the market's aborted recovery. And if my inbox is any indication, investor emotions are nearing critical levels, as the major indices tick closer and closer to the March lows.

Let's look at four of the biggest story stocks on Wall Street and see where they might be headed in the next one to three months. I suspect this analysis won't make shareholders happy, and I'll suffer the consequence with the typical flames these stocks induce when I don't stroke them like furry pussycats. Oh well, that's life on this side of the keyboard.

Apple

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Source: eSignal

Apple topped out in May, after failing to test the all-time high at 202, posted in December. It was a noteworthy failure, given the recent launch of their 3G phone. The stock has been pulling back for the last six weeks, retracing nearly 30 points before Friday's bounce. Notably, it's still trading above the 200-day moving average support.

I've been watching the trendline drawn across the recent selloff lows. Despite last Friday's reversal, price is more likely to hit that support line than to trade back above 182, especially in this wicked market environment. So let's look for this bounce to fail and give way to a renewed downdraft that yields a stronger buying signal closer to 157.

Also, look at November's selloff into 150 because it should offer a good reference point for price action later this summer. A turnaround at or above that level would mark out the boundaries of a bullish inverse head-and-shoulders pattern. This is a consolidation pattern that triggers a buy signal when price rallies above the "neckline" drawn across the highs.