“In the past, Apple had always recovered after a bout of profit-taking and marched on to new highs,” Bill Gunderson writes for MarketWatch. “This time was different, however. By early October, the stock broke below its 50-day moving average for the first time in six months. Early profit-taking then started to escalate into some serious selling.”

“In mid-October, the 20-day moving average crossed below the 50-day for the first time in five months. This was its first so-called death cross and now even ardent believers in the stock began to take notice,” Gunderson writes. “Early profit-taking had turned into serious selling, and now panic selling was starting to set in. The stock then proceeded to go almost straight down for almost two months. Full-blown distribution finally hit America’s darling, and $705 became $505 very quickly.”

Gunderson writes, “I don’t know about you, but I never buy a stock in a downtrend. Even though it was tempting, we first needed to find out where the downtrend would eventually end. The stock had some support in the $500 area, but after a quick little 90-point bounce, the ugly downtrend resumed. The stock tested $500 again, and it looked like it might hold, but then gapped down again after earnings and finally settled in the $450 area… Now that the stock is $450, isn’t it time to get back in?”

Read more in the full article here.