Many technology stocks have experienced pullbacks recently, highlighted by the NASDAQ 100 index falling off its highs since mid-September. The pullback presents a trading opportunity in certain strongly trending stocks. Current conditions point to a buying opportunity for these stocks, but a continued decline that brings the prices below key support levels would serve as a warning that the uptrend is over.
Apple Inc. shares began a major uptrend in mid-2016. During that time, pullbacks have been approximately 6% to 12%. The pullbacks have then been followed by a rally to new highs. Between Sept. 1 and Sept. 25, Apple shares pulled back as much as 9.57%, putting the pullback within the historical norm. While the price could continue to drop a bit lower – a decline to $145 would still be within the norm – Apple has entered a potential buying zone. (See also: Why Apple Stock Could Climb 10 Percent.)
If the uptrend remains intact, buying in the $150 to $154 region provides an upside target of $170 to $174 on the next swing higher. The danger is that the pullback may not be over. A stop-loss order could be placed below $148 – or below $145 to give the trade a bit more room (but with a worse risk/reward ratio). If the price falls below the June swing low of $142.20 and does not quickly recover back above that level, then it is highly likely that Apple is reversing the trend, and caution is warranted on any long positions.
Current prices represent a buying opportunity, but further declines could signal a reversal of the long-term uptrend. …read more
Read more here: These Tech Stocks Are Near Trade Levels
Category: AAPL, ADBE