The video this transcript is based on appeared on December 18.
NEW YORK (TheStreet) -- Apple stock took another holiday hit after China Mobile did not deliver the gift of a deal.
Apple stock has taken a couple of punches today, causing it to move lower. First came the word from Apple supplier Jabil that it had a weak quarter, then the expected deal with China Mobile did not materialize. It was anticipated that an announcement would come this week but it hasn't. Plus, China Mobile said that the deal wasn't complete and that the companies were still just talking. As a result the stock started selling off. Joining us now is Donovan Lazar, the general manager at the Online Trading Academy. So Donovan, a lot of traders bought Apple on the expectations of this China Mobile news only to be disappointed. So what's the best response when something like this happens?
Well first of all, you really shouldn't be buying stock on unexpected news. I mean the fact of the matter is that's a crap shoot to say the least. If you are in the stock which I would hope most people would have what we call an exit strategy at Online Trading Academy, we go into everything while managing our risk so we have stop-loss built in, we manage our targets. At this point if you don't have those things built in where you bought the stock and put a stop loss in, honestly I would get out the stock. There's no rhyme or reason to be in it. If you don't have the exit strategy you have a hope and a prayer at this point, because it's gonna trade very emotionally from here, and we don't know what's going to happen.
Well that's what I was just about to say, when you're going into it methodically like that where you've got these points, you're taking out the emotion and you're just looking at it as a number game. Now you know when we do look at these charts, when we look at the one year chart the stock look like it's doing okay, but then when we look at this longer one, this year chart now looks like there's a lot of work that's got to be done here.
Yeah absolutely and that's one of the things that that you're seeing now is you have what I call the momentum junkies they, you know Apple's bottomed out it's starting to look a little bit better. They're looking at this if the stocks going to get back to $700. The reality is when you look at institutional order flow you have a lot of levels of supply from here to seven hundred to a thousand to 6 hundred. So it has a lot of work to do. Looking at the recent past is fantastic if you're into a trade for the next 10 minutes, but if you want to be involved in something for the next two weeks you know to 2 years, you have to really go back and see where is that institutional order flow coming in because let's be real, the institutions control the market, they create the moves. The retail public and novice investors are just lucky to take a piece that action. You have to be very careful on making that assumption, especially today. This news could drag out for quite a while and have a huge emotional impact on what stock does on a daily basis.
Alright, what do you see what the institutional players and Apple?
I think under 500 you have some significant buying opportunities, as far as institutional order flow coming in. The institutions are patient, they're disciplined, they set up opportunities and they wait for price to come to them. They're not the momentum junkies out there like the novice traders, the retail traders out there, so they're gonna wait for price to come to them. They're then going to get involved. So anywhere under 500 I would start to look at it. I'd be very careful around six hundred, and pushing through that level. So I'm giving a fairly wide range, but the reality is at six hundred give a lot of supply out there, you have institutional orders that are sitting out there that when it hits, they're gonna sell.
Alright well that is good advice from Donovan Lazar, he is over it Online Trading Academy. Take a look at those numbers because those are some pretty good levels to watch. I'm Debra Borchardt with TheStreet.
Written by Debra Borchardt in New York.