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Abigail Doolittle: Bear Signs In Apple, Transports?

Wednesday, 14 Mar 2012 | 6:27 PM ET

Technical analyst Abigail Doolittle noted bearish elements in the charts for Apple stock and the Dow Transports.

“Apple really is, at this point, all about its parabolic move,” Doolittle of Peak Theories Research said Wednesday on “Fast Money.”

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Volatility Playbook & Charting the Transports
A play to protect your long position in financials, with the Fast Money traders, and Abigail Doolittle, Peak Theories, checks the charts for a longer-term break down of Apple stock, and the Dow Jones Transports.

“The minute, though, it starts to reverse below that trend line, which will happen again — a parabolic move, by definition, cannot last forever — it is going to drop quickly back down,” she said. “One reason to think this will happen is a long-term, ascending trend channel. It’s very likely that the support and the resistance in this channel’s going to pull it back down.”

Doolittle said that while Apple’s trend was up for now, its downside might come hard and fast to close gaps at $552, $477 and above $430 or so.

“The nature of a parabolic move is, it will reverse at some point. That being said, so long as the parabolic move is on, it is on and it’s in effect,” she said. “Apple could ride up higher, but again, at some point it’s likely to make that pull-back, maybe it is when valuation becomes a little bit richer.”

In the Dow Transports, Doolittle saw two rising wedge patterns — but noted the bearish patterns were not confirmed.

“Above 5,400 both of those bearish patterns are invalidated, and it would seem that there’s going to be a continued rally,” she said. “But below about 5,000 or so, that divergence may begin, and it’s more likely those patterns will continue to fulfill down.”

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Trader disclosure: On March 14, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Najarian is long AAPL; Najarian is long C calls; Najarian is long INTC; Najarian is long YHOO; Najarian is long JOYG calls; Najarian is long COP; Najarian is long PEP; Najarian is long HPQ; Najarian is long LULU calls; Finerman is long BAC; Finerman is long JPM; Finerman is long TGT; Finerman’s firm is long AAPL; Finerman’s firm is long JPM; Finerman’s firm is long WMT; Adami is long C; Adami is long GS; Adami is long INTC; Adami is long AGU; Adami is long NUE; Adami is long BTU

For Ron Insana
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For Mike Khouw
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For Dennis Gartman
Gartman is long gold in Yen terms

For Abigail Doolittle
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