The Case for selling AAPL

There are three reasons why Apple (NASDAQ:AAPL) is heading lower.

Almost inevitably, I always become more vocal when AAPL is at a resistance level, but there are clearly times to buy AAPL as well.  I was pounding the table near $395, for example, because it was clearly oversold back then, but that is not the case now.  Although I will be a willing buyer of AAPL again at some point (almost for sure), now is not that time.

First, nothing is wrong with the company, I actually just bought a Mac-book Pro and it is probably the most powerful and well-built machine I have ever had, so I also like the products, but products do not make you money in the stock market.  All that matters is price, and if you are paying attention, the price of AAPL is ripe for a pullback.

First, the Stock surged by 10% from the Thanksgiving Holiday week up until the announcement of the China Mobile deal. on Thursday  If you don't think the news was expected, go back and look at what the stock did leading up to the news.  Not only had the Street been wanting the China Mobile Deal for years, but they bought AAPL ahead of the news as well.  We can never say for sure, but they seemed to know it was coming.

Second, the reaction to AAPL's stock price after the news was a dud.  The stock did nothing, and if you were expecting a surge on the news you were definitely disappointed, but this is nothing new.  AAPL tends to rally on rumors, and sell-off on news.  Thus far that is exactly what has happened here.  'Buy The Rumor - Sell The News' is absolutely in effect.

Third, the stock hit our longer term resistance level on Thursday, and that is a sell - short signal.  It also tells investors to hedge their positions because AAPL now has the propensity to decline back to longer term support as that is defined in our real time trading report for AAPL.

Therefore, given the above discussion, even though Apple is a good company, even though I like their products, I realize that those feelings are not going to make me any money.  All that matters is price, and this is definitely not the time to be buying AAPL.

If you want to see me debate this live, I did so yesterday on Fox Business News.  Listen here: