Apple leads tech stock reversal

August 25 05:03 2015

Apple (AAPL) investors watching the stock’s ongoing implosion have wondered how low the stock could go. They may have found out Monday. Shares of the gadget maker were mercilessly crushed early Monday until hitting the low-water mark of $92 a share. Once the pummeled stock hit that magic number – it rallied off the lows – but still hit major pressure and fell back

In many ways, Apple personifies the panic-stricken sell-off earlier in the day – the midday stunning reversal – and then the late-day fade. Apple’s volatility is somewhat of a controlled experiment showing which stocks are most vulnerable to selling pressure – but also at what levels there’s strong buying support. Apple is the battleground stock where bulls and bears or squaring off. Bears insist smartphone growth is slowing, price pressures are rising and the important market of China is slowing down. Bulls think new Apple products,  including a refreshed smartphone expected to be announced in early September, will reinvigorate growth.

The disagreement over Apple – as well as the entire market – is manifesting itself in huge volatility in Apple and in the entire market. Monday was the first day there was a 5% swing from the market’s high and low all year, says Fane Lozman of based on the Dow Jones industrial average. That means there’s plenty of room for more volatility as the battle between bulls and bears rages on, Lozman says. There were 29 days in 2008 when the Dow swung 5% or more during the day, Lozman says.

As a microcosm, the wild ups and downs in Apple stock shows there’s plenty of convicted investors willing to battle over what this stock is worth. Apple had cratered 13% to its panic-induced low point during the day, when the Dow Jones industrial average had been down more than 1,000 points. Shares then staged a 18% rally from the low, pulling the beleaguered stock back over $100 a share – a key level bullish investors wanted to see hold. But the stock is hardly strong – and is now down $2.86 or 3%, to $102.71 on the day.