Thoughts and Revolution Technical Analysis on Apple

Apple’s got the flu. Well, AAPL has the flu. The company itself is set to see revenues and margins grow for the next couple quarters which will explode earnings higher.

Here’s an important Apple headline for technical traders:

Regulator Investigating Rochdale Trading

A person familiar with the thinking of Rochdale executives said a trader at the firm received an order for stock in Apple Inc. AAPL +0.15% but bought 1,000 times the number of shares requested. The trader is saying the extra shares were ordered by mistake, the person said, but the firm is alleging the actions were intentional. The company suspects the trader was working with an outside party to execute the trade and profit at the firm’s expense, according to this person.

It’s possible that this rogue trader of a billion dollars worth of stock at a tiny brokerage firm and the subsequent unwinding of that trade has been a weight on the stock, although the reports indicate right now that the trade was “immediately unwound”, at least according to the NY Post:

FBI probing Rochdale Securities - NYPOST.com

["Rogue" trader] Miller’s $1 billion Apple trade was discovered and unwound in the same day.  He stopped going to work the next day.

Miller, who typically focused on the biotechnology sector, has not returned to work since placing the trade, several sources said.

“He walked out the door the next day and never came back,” said one person familiar with the situation.

Even if the billion dollar AAPL long trade was unwound the very next day, that forced trade alone would have definitely made the stock tank lower that day affecting the technicals thereafter.

I have been long and telling people to get long AAPL since $7 and I’ve seen many a 20%-plus pullback over the years that would make the current 17% pullback seem like a pimple on a wild boar’s back. Which means two things I guess -

1. This stock could still pull back even further before it resumes it likely ascent to my long-held $1000 price target.

2. Let’s not freak out about this pullback as we use the weakness in AAPL to scale back into some of what we sold when it was closer to $700.

Nothing’s easy in the stock market.

On another note, I’m sending more cash into my stock accounts, adding another 10% or so to the overall size of the portfolio, making my current cash position even higher than it already was in my current defensive stance.

French bulldog tends German six wild boar piglets Berlin Germany

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