Apple shares could drop another 10%: Technician

Apple shares are sliding into year-end, falling more than 10 percent this month as analysts have expressed doubt over the tech giant's ability to keep up its impressive iPhone sales record. The popular stock has also underperformed the broader market, down 4 percent year to date compared to a 2.6 percent decline in the S&P 500.

And looking at the charts, one technician says there may be even more room to fall as the stock breaks below an important level of support.

"We could see a little bit more shakeout here with the shares," Craig Johnson of Piper Jaffray said Friday on CNBC's "Trading Nation." "Over the last several months, the Apple chart has started to look a little distributional ... you can see that it's sort of rolling over a little bit and the most recent relief rally kind of stalled out right back at its 40-week moving average."

The next big area of support comes in around $95, Johnson said. That would be another 10 percent drop for Apple shares, which closed Friday at $106. If the stock ends the year in the red, this will be its first year of negative returns since 2008.

Max Wolff, chief economist at Manhattan Venture Partners, says while the market reaction seems excessive, there is admittedly some cause for concern for investors.

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For one, the watch is proving itself to be an underwhelming product, and isn't expected to contribute significantly to revenue or earnings for a long time, he said. Additionally, iPhones labeled with a letter like the 6S or 5S, tend to lag in sales compared to their classic counterparts, Wolff said.

However, he remains optimistic heading into 2016.

"I think this is way overdone, I think they're going to come out of this quarter very strong so they'll have a really good year-end," Wolff said Friday on "Trading Nation."

Piper Jaffray analyst Gene Munster also brushed off concerns over Apple's latest iPhone cycle in a Tuesday research note.

"This week, investor concern about iPhone growth has increased based on measurable cuts to analyst estimates along with today's Dec 15 guidance revision by Dialog Semiconductor," a chip producer that supplies Apple, Munster wrote. However, he said the performance of individual suppliers should not be indicative of the health of Apple's iPhone business.

Instead, Munster recommends that investors focus on the new iPhone expected to launch next year.

"Most importantly, based on feedback from investors, the next few quarters appear less significant to the broader iPhone story and the more important question is whether the iPhone will grow during the iPhone 7 cycle," he wrote. "We remain confident in our 4 percent cycle growth for iPhone 7."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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