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Will a Market Correction Make Apple Stock a Buy?

Apple stock is trying to hold up, but is struggling amid the market correction. Here's where support may come into play.

Apple  (AAPL) - Get Apple Inc. (AAPL) Report has not been doing all that well lately, although it’s holding up much better than other groups, such as growth stocks.

Apple is down about 2% so far on the day, which is slightly better than the decline we’re seeing in the Nasdaq. As it stands, shares are down almost 10% from the highs made earlier this month.

The company recently introduced the latest iPhone just a few weeks ago on Sept. 14.

However, the stock topped a week prior to that on Sept. 7, while it's now working on its third weekly decline in the last four weeks.

Clearly Apple hasn’t been able to outperform the indices during the latest pullback. So will further selling pressure make Apple stock a buy?

How the Long Tech Rally Evolved

Trading Apple Stock

Daily chart of Apple stock.

Daily chart of Apple stock.

Last week, the stock bottomed at $141.27 and enjoyed a four-day rally. The rebound was enough to fill the gap, but bears remained in control as Apple failed to reclaim the 10-day moving average.

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That was the first sign that the bulls may not be in the clear quite yet with Apple stock. 

Rolling back over on Monday and doing so again on Tuesday, last week’s low remains vulnerable. If Apple breaks $141.27 and can’t reclaim it, we’ll have a weekly-down rotation.

That would put the 21-week moving average in play and give bulls a chance to make a stand. However, if this area doesn’t hold as support, investors will have to look further down the chart.

Specifically, I’m keeping an eye on the $138 area. Not only would a test of this area send Apple stock back to the prior major high from September 2020, but it would also come into play near the 161.8% downside extension of the current trend.

That’s only a few dollars per share below current levels, but should Apple get there, I would expect some sort of bounce. Otherwise, it puts the 200-day moving average in play.

On the upside, there are not any gaps left to fill. However, investors will need to see Apple clear the 10-day moving average, which has been resistance.

That's followed by last week’s high at $147.47, then the 50-day moving average.

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