Updated with additional comments from Jim Cramer.
Shares of Apple (AAPL) - Get Report have been struggling badly since their Jan. 6 close below $101. Just prior to the Jan. 6 breakdown, the stock appeared to find its footing near a major support zone. Once this key area gave way, selling pressure began to pick up again. Since then, Apple has been drifting steadily lower as a new down leg began. For patient investors, this process will soon produce another low-risk entry opportunity.
Apple dipped below $94 earlier in today's session before rebounding. The stock did not make a new low despite the midday flush in the major indices. This is a good indication that Apple shares are becoming sold out in the near term. In addition, volume appears to be running relatively light considering the damage. As this process continues, coupled with further yet well-contained loses for Apple, the retest of the $92 area will create a very low-risk buying opportunity.
In the very near term, patient Apple investors should keep a close eye on the Aug. 24 spike low of $92. Just below is the stock's 40 week moving average near $91.70. A touch of this long term indicator will be first since the summer of 2013, which incidentally marked a major low. As Apple drifts down to this area, it will return to a deeply oversold moving average convergence/divergence indicator. For Apple bulls, a slightly deeper drop from current levels will offer a very low-risk entry opportunity.
Apple is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. "We got a nice snap back in Apple today," Cramer said, "as people are realizing that it represents good value and it should be owned not traded even as so many analysts seem to be tripping over each other to make you bounce in and out of the darned thing."
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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.