Apple (AAPL) - Get Report is getting hit hard today. Disappointment with last night's earnings report resulted in a deep downside gap on today's opening bell. The stock has stabilized since the initial selling wave, but remains in breakdown mode. In the near term, more downside is likely and, for patient Apple bulls, a very attractive entry opportunity will develop.
Despite the steep losses today, Apple is still trading above last week's low. Considering the downside momentum unleashed since last night's report, a takeout of this level appears likely. Once through, the stock will soon enter a major support zone that includes the giant Aug. 24 spike low at $92 as well as the 40-week moving average near $91.75. If Apple can regain its footing in this key zone, a solid base could begin to form. As this area comes into play, Apple will have stretched its loss from the November peak to over 25%. A rebound could recover a good bit of ground.
In the near term, Apple bulls should keep a close eye on the $93 area. If this area is pierced while selling pressure begins to show signs of easing, a significant hold may lie ahead. The buy zone runs from just above $92 to $91. A close below the $90 level would do similar damage that the sub-$101 close did back on Jan. 6.
Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.