I mentioned that some of the biggest names on the market are performing poorly right now -- Apple (AAPL) is the case in point. This $410 billion tech behemoth has been writhing for the last few months, dropping like a rock at the exact same time that the S&P was rallying hard. But I think that Apple's pain could be coming to an end soon.
That's because Apple broke its long-term downtrend resistance line late last month -- and even though it's continued to move lower in the last couple of weeks, it hasn't re-violated that trend line. In fact, it's staged a pretty textbook "pullback" to newfound support very recently. With slightly higher lows coming into play in this stock right now, it's a pretty pivotal time to be an Apple buyer. While there's still considerable risk in buying here, the risk is easily defined at least. I'd recommend putting in a a protective stop just below $420 support.Momentum, measured by the 14-day RSI line, adds some extra confidence to the trade. The long-term momentum downtrend for Apple broke just ahead of the downtrend price break; now a more noticeable uptrend in RSI points to a reversal in AAPL. I'd recommend keeping a very close eye on this name right now.
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