One of the most talked about stocks is by far Apple, in recent years it has been a market leader. In the sense that when Apple did well, the market did well, when most would think the market dictates how individual stocks trade.
However, stocks cant always continue to increase in price, we are not going to sit here and tell you that you should have bought Apple at $93 back in March and that you should have sold at $112 and rode the trade perfectly.
What you and I can both see, is how clearly the upward trend Apple clearly broke around 10 days ago.
Now stocks tend to fall much faster than they rise, why is that?
Everyone loves to see there positions profiting right, so there is no rush to get out, once the tide turns and investors start to see red. They get out, first smart money or professionals will get out quick and/or get short. While the individual without a plan with use the "hope & pray" method. "Please just go back to $112 and I will sell, please let it get back up to $110 and I will sell, etc etc.
Now Apple missed on earnings, gaped down rightfully so and has broken through that support level of $93. Now any investor who has purchase Apple stock from Jan 1st until now is in a losing position.
Do you think all of the investors who purchased Apple stock this year will start to puke more of there stock since now all of there positions are in the red?