In a bull market, share prices go up like an escalator and correct like an elevator. That's exactly what we're seeing in AAPL stock after a poorly-received earnings report on Friday.
Apple shares are down 1.7% today and weighing on broad sentiment on a continuation of selling. It's been an incredile run from $123 to $198 this year and profits are being taken.
I think a Fibonacci retracement is the best way to look at this chart, given the one-way price action. The question is: to draw it from the January or March lows. I can see the case for either but given the minor drop in March, I prefer this look and there's a nice confluence of support at the 38.2% retracement, the psychological $170 number and the May lows.
A fall to $170 would be a further 5% decline while a break of that would clear the way to $161, which would be a further 10% drop.
In order to get to the lower number, I'd have to envision a more hawkish Fed or some harsh Apple-specific news. The main market risk this week is the US CPI report.
