Apple's Charts Have Bruises

Updated with Apple share price.

Jim Cramer has hit upon a theme that resonates -- the Internet mobile tsunami. He's already written extensively about this sector trend that remains one of the few areas in the economy that currently shows growth.

That growth is expected to continue unabated for years. He has created a list of 21 companies that, in his opinion, are poised to participate in that tidal wave of growth and expected to create returns that are worth participating in.

Starting today, and for the next few weeks, I'll take a look at some of these companies from a technical perspective, offering my thoughts on:

• If they are a buy.
• If so, then where is the optimal buy point?

When attempting to enter an equity, the primary considerations (from my perspective) is to:

• Always attempt to time your purchases such that your average entry point is nearest to the lowest price that prints vs. the highest price (for the timeframe where you are attempting to gain entry).
• Average in and average out (making partial purchases on the entry and exit points)

With these thoughts in mind, we start with the poster child of progress -- Apple (AAPL Quote). Apple is one of the few companies that not only recently made all time highs in price, but has more than doubled in price since the March lows. With the iPhone product, it stands to benefit from the tsunami growth that Cramer speaks of. So, what do the charts say?

Long Term Timeframe

If you pull up a three-year, monthly chart of AAPL, what you see is that this entire move higher since the $115 level is nothing more than a suspect bullish advance. I say that because, as prices advanced through the previous swing low, volume did not confirm price. That is a red flag -- a warning sign.

Apple Monthly

Source: Prophet Net

After the feedback received last week over the Goldman(GS Quote) piece, and given the love for AAPL, I expect that this notion of AAPL retracing deeply may not sit well. I realize this, yet I follow the charts and do what they tell me. What they say, loud and clear, is that AAPL, on a long-term basis, has problems that eventually require redress.

Shares of Apple closed up 70 cents to $189.20.