Apple – 24/1

Apple shares currently trading 10% down on the day, at a new 1-year low, due to weaker-than-expected results and weak holiday iPhone sales.

The AAPL chart looks terrible. Potential support is at the $400-$420 area but the stock is like a falling knife you don’t want to touch.

Since September 2012, when AAPL shares hit an all-time high of $705 right after the iPhone-5 release, they have lost about 35% of their value, or about $250 billion in terms of market capitalization.

The fundamental reason for the severe bear market on the stock is evidence that the company is losing its dominance in smartphones and that increasing competition from Samsung and other tech companies will cut into Apple’s profit margins.

AAPL’s weighting on the Nasdaq-100 is about 15%, which explains a lot about Nasdaq’s underperformance vs the S&P.