While the decline from the peak has been swift, the last few trading sessions have really put the pressure on this technology bellwether. Historically, stocks that decline 30% or more are certain to give investors heartburn, even if watching it on their iPads, moves like this are not unprecedented. To magnify the issue the decline has totalled over 200 points (Apple peaked just over $700 in September,and as of today trading under $490 creating even greater sticker shock. Our friends over at Bespoke.com recently posted an interesting chart of the recent price decline of Apple.
The chart below shows the ten declines of 20% or more that AAPL has experienced over the last ten years. The financial crisis of 2008 sent most stocks down 40%-50% or more, but as you can see most of the historical declines for Apple have been in the 20-30% range. With this in mind the current pullback may be getting a little long in tooth. There is an old saying on Wall Street that says “dont catch a falling knife”, and stocks that are low can always go lower. This will be one to watch for some consolidation and a potential change in trend from negative to positive. Stay tuned.