Trading By the Numbers: Time to Take Another Shot at the Apple?
Traders who have been kicking themselves for missing a chance to buy shares of Apple (AAPL) a month ago may have a second shot at the stock as a sell-off of well over 2% sends the stock toward oversold territory ahead of the final trading day of the week.
Shares of Apple have been trading lower since rallying to a new, 52-week high in mid-October. Thursday’s breakdown, which saw the stock drop beneath a trading range that extended back for several days, now puts Apple more than 8% off its highest levels of the year.
Weakness in Apple was also blamed for holding back the Nasdaq 100, with the PowerShares QQQ Trust ETF (QQQ) underperforming both the S&P 500 SPDRS ETF (SPY) and iShares Russell 2000 Index Fund ETF (IWM).
Pullbacks in Apple have been opportunities for short term traders in recent weeks and months, particularly when those sell-offs took the stock into oversold territory. Although the volatility in a stock like Apple is not as large as that of smaller stocks, even the modest ratings upgrades the stock has earned have proven worth knowing for traders looking for lower priced entries.
Another selling story from the Nasdaq comes in the continuing saga of Green Mountain Coffee Roasters (GMCR). Green Mountain Coffee Roasters belong to that gang of growth stocks like Netflix (NFLX) that have begun to attract doubters in recent weeks. The problem for Green Mountain Coffee Roasters is that one those doubters is hedge fund heavyweight David Einhorn of Greenlight Capital.
Falling into bear market territory shortly after the middle of the month in October, shares of GMCR plummeted by more than 38% in Thursday’s trading, closing at their lowest levels since the spring.
A more compelling pullback for coffee-obsessed traders may be the far milder sell-off in Peet’s Coffee and Tea (PEET). Shares of PEET have been trading in bull market territory all year, and have been in correction mode since late October in the wake of new 52-week highs.
PEET has closed lower for the past two days in a row, four out of the past five, and have finished in technically oversold territory for a second consecutive session. Shortly after the stock’s last trip to similar levels in the late first half of September, traders bid the PEET shares by more than 3% over the next four days.
The stocks and ETFs in today’s report were drawn from the data and research available through PowerRatings. To find out more, click here.
David Penn is Editor in Chief of TradingMarkets.com