Pros: Why Apple shares took a dive today

“Apple’s share price took a dive on Monday morning, dropping about 6 percent before making a slight recovery,” Cadie Thompson reports for CNBC. “The iPhone maker’s volume spiked to 6.7 million shares around 9:50 a.m. ET. It was the largest one minute volume of trading since Oct. 29, according to Reuters.”

“Why the stock took a hit wasn’t so clear,” Thompson reports. “RBC Capital Markets analyst Amit Daryanani said traders told him reasons for the selling may include a rating change Morgan Stanley made Monday, cutting the U.S. technology sector to ‘market weight'” from “overweight.” The firm also cut its Apple weight to 3 percent from 4 percent and recommended clients trim their position in Apple.”

“Lou Basenese, founder of Disruptive Tech Research, said that while he’s not hearing anything specific, the most reasonable explanation is that investors are just ready to cash out,” Thompson reports. “‘I think the most logical explanation is profit taking. Shares were up about 25 percent off the October lows, compared to a 10 percent move for the Nasdaq,'” Basenese said.”

Read more in the full article here.

“Large sell orders were seen at 9:51 a.m. EST (1451 GMT), with more than 6.7 million shares trading in a one-minute stretch, the heaviest minute of trading in Apple since Oct. 29,” Chuck Mikolajczak reports for Reuters. “The stock lost over 3 percent in that minute, falling as much as 6.4 percent to $111.27.”

“The cause of the decline was not yet clear, though traders pointed to high-speed algorithmic trading programs as a potential culprit. Steve Hammer, a trading educator and founder of HFT Alert in Santa Barbara, Calif., which monitors algorithmic trading, said about 300 different stocks showed elevated price traffic beginning about 9:50 a.m. EST, a sign of institutions putting on sell programs,” Mikolajczak reports. “‘When you see that kind of price action that is simply algos running stocks,’ he said.”

“Morgan Stanley strategists dropped Apple’s weighting in their strategic portfolio to 3 percent from 4 percent in an equity outlook note released Monday, but traders said the swiftness of the decline was too dramatic to be attributed solely to the note, which was released before trading opened,” Mikolajczak reports. “Joseph Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey, said ‘maybe it was the Morgan Stanley news that kind of stimulated the event,’ but not enough to cause such a decline.”

Read more in the full article here.

[Thanks to MacDailyNews Readers “Fred Mertz” and “Arline M.” for the heads up.]

23 Comments

      1. And now we have the pack of negative news vermin howling about anything can could possibly be construed as affecting Apple negatively, from Apple Pay to Mac mini.

        But no, it’s not an orchestrated, concerted effort to drive Apple down. No, it couldn’t be. That’s just conspiracy theory stuff. /s

  1. Bought 900 shares on the dip…..simply an opportunity….
    Unless you believe SamDung will rule this “holiday season”…..

    The sky is falling,,,,,,Apple is dooooomed!!!!……..NOT!

  2. This is classic manipulation. Morgan Stanley is taking profits which they need for Q-4 (probably a large block) hoping to trigger sell signals to the computers who track their activity and push the price down while they are telling the world they told 1 percent of their holdings. This was all done under the air cover provided by their “sell side analyst” a couple of days
    prior which gives them the option to get back in after the drop ( 5 percent) which is news they don’t release…..where is the SEC…..nowhere to be found, as usual!!!.

  3. look at MSFT – it is less than 1/3 normal volume and up on week volume while the rest of the techs have crossed their normal full volume before noon on high volume trades. why was MSFT untouched while the rest of the NASDAQ was hit?

    1. Yeah, Microsoft’s share gains has been pacing Apple for about a year, but why no profit-taking from Microsoft. Wall Street clearly sees Microsoft as a better investment than Apple. I believe Microsoft had recently gotten an under-perform rating but the stock is still rising.

      A one day drop of Apple’s share price doesn’t bother me at all and occasionally I expect as much to happen without being able to pinpoint to any negative reports. Apple is just Apple. I’m sure Apple’s share price will be back up to where it was by the end of the week or certainly by the end of the quarter. Whatever.

      1. I hope that guy that was talking about how he kept a stop loss order on Apple didn’t get triggered at $111 to lock in a $4 per share loss. This is precisely why I haven’t used stop losses on Apple in years. I learned the hard way.

  4. Sheepeople.

    If you invest in companies for the long term, which I recommend, news like this means nothing. Cloven hoof Apple hater Henry Blodgett of course is having an orgasm over this.

  5. Gee Apple loses a couple of dollars it’s no big deal. It’s probably just reaching a plateau, no crazy reason needed though.

    I’d rather see this than a crazy skyrocket and crash.

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