How do you erase almost $50 billion from your market value? Just report record sales and profits, and add $16 billion in cash onto your balance sheet. At least that's what happened with Apple yesterday.
We wouldn't be talking about important technical stories in big stocks if I didn't include Apple in the mix. The $483 billion tech firm has been in a downtrend since mid-September, but its huge 10% haircut after earnings yesterday is what's most notable from here. Technically, that drop means a lot -- it shoves Apple from testing resistance at $540 down to test newfound resistance at $490. That's not particularly bullish.But Apple's converging trendlines (the grey dashed lines in the chart above) do bode a little better for the firm. They signal a falling wedge in Apple, a pattern that indicates a reversal around 90% of the time. The buy signal comes on a breakout above the upper trendline -- a move that would coincide with a push through R2. I'm not ashamed to say that I like Apple from a fundamental standpoint. In fact, I featured the stock yesterday as a cash-rich stock to buy in 2013. But like any competent market technician, my caveat to that was to wait for the downtrend to break before becoming a buyer. Clearly, sellers are still in control of this stock at the moment, and fighting the tape is just going to mean losses for investors who are early on this stock. That said, some of the biggest opportunities arise when fundamentals and technicals converge. That's reason to keep an eye on Apple in February. I also featured Apple, one of SAC Capital's holdings, recently in " 5 Dividend Hikes to Watch for This Earnings Season."