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Apple Passes 'Death Cross' As Shares Slide

Javier E. David | Special to CNBC.com
Friday, 7 Dec 2012 | 1:31 PM ET
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Shares of Apple on Friday pierced a key technical level monitored by chart watchers, which could signal more declines to come for the technology giant's stock.

After flirting with a closely watched area on the charts that analysts refer to as the "death cross," Apple finally succumbed to relentless selling pressure that dragged it into bear market territory earlier this week.

The stock's 50 day moving average is now below its 200 day moving average, and is off more than 23 percent since scaling to a record high in September at $705.

Apple traded lower nine out of the past 11 weeks, erasing approximately $150 billion in market capitalization. Investors who once saw no shortage of reasons to buy the stock now seem to find any and every excuse to bail out of it.

The reversal of fortune has been jarring for a company which, just a few short months ago, had a high-flying stock that made it he world's most valuable company. The stock had only just recovered from a deep sell off when, earlier this week, a seemingly innocuous change in margin requirements for holding the stock triggered a new rout.

While margin changes are normally administrative in nature, they can signal a change in how risky investors perceive a security to be. Last year, a European clearing house changed its margin requirements on Italian debt -- which sparked a brutal nose dive in the country's government debt that drove yields to unsustainable levels above 7 percent.

According to Apple watchers, investors are growing increasingly wary of the competitive threats the company faces, amid questions about whether its profits and innovation can keep pace with earlier years. (Read more: Apple 'Becoming Just Another Stock': Santoli.)

Some observers say that Apple is suffering from the "fiscal cliff" hangover that is affecting the market. In the last several weeks, investors have bailed out of stocks that might see dividends cut sharply by the higher tax rates that loom if Washington fails to reach an agreement.

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