The bears are devouring Apple.
Todd Gordon of TradingAnalysis.com notes that even with Apple’s fall from the highs, it’s still trading far above one of its “defining technical indicators” that has been a reliable source of support for the stock since the turn of the century.
“Looking at the 200-week moving average, which essentially tracks Apple’s price over the last four years, every pullback that we have seen [since 2000] has really come back to this 200-week moving average,” Gordon said Thursday on CNBC’s “Trading Nation.”
The 200-week moving average currently sits around $150, roughly 13 percent lower than where the stock was trading on Thursday afternoon. “If this overall market is going to take another leg down I think Apple is going to test that $150 level,” he added.
To play for this move lower, Gordon suggested buying a put spread. Specifically he looked to purchase the February 160/150 put spread for $2.50, or $250 per options contract. This is a bearish bet that Apple shares could fall as low as $150 by mid-February.
Apple shares were down more than 1 percent on Thursday.