We can't talk about big trades without bringing up Apple (AAPL - Get Report), the $528 billion tech firm that's been catching so much attention from traders in the last couple of months. Apple rallied hard with the broad market from June to September, and then it followed up by dropping like a rock for the next couple of months. But a v-bottom in Apple points to the end of a nasty trend here.
Earlier this month, I featured Apple in this column, and pointed out two important support levels that could be stopping points for shares. Well, the lower one at $520 proved to be the ultimate "price floor" for this stock, spurring a sharp reversal higher called a v-bottom. And because the higher level failed, we've got a good indication that it's a weaker level that should pose less of a challenge for shares on the way up.
Momentum, in the form of RSI, adds some extra evidence towards upside in Apple; the RSI downtrend that's been in force since late August got broken this week. Since momentum is a leading indicator of price, that's a good sign for investors looking to get into AAPL at a lower price. With the bounce off of $520 support already in effect, now's a good time to be a buyer -- just keep a reasonable stop loss in place.
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