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It's time to short Apple: Technician

One technician is warning investors not to be fooled by the recent run in Apple.

After taking a heavy hit on concerns over slowing iPhone sales, the tech company's stock is bouncing back, rising 6 percent in one month. But Todd Gordon of TradingAnalysis.com believes there's a lot more pain coming for the popular stock.

"Apple has lost its uptrend and continues to be a weak stock," Gordon said Tuesday on CNBC's "Trading Nation."

According to Gordon, Apple shares have broken below an uptrend tracing back to 2013, which has now become resistance for the stock. Gordon said he's sticking with his bet that Apple will head into the mid-$80 level.


He also said the relative weakness he's noticed in technology and consumer discretionary stocks suggests bad things for Apple, which makes discretionary technology products.

However, Eddy Elfenbein of the Crossing Wall Street blog warned investors against taking short positions in Apple. With the stock trading 25 percent below its all-time high and an impressive cash hoard, Elfenbein said such a bet may be very dangerous.

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"This is a company with $250 billion in the bank. So what you're talking about is shorting a bank account as one-third of the company," he said Tuesday on "Trading Nation."

Anyone who is looking to short Apple's stock should also be very careful of the timing, Elfenbein said, especially when nearing the next earnings report and a potential dividend increase.

"i would very carefully watch those exit positions, because anything could very quickly turn against you and push this stock much higher," he said.

Gordon acknowledged that shorting Apple could be risky, even if only in angering the company's fan base.

"I didn't get enough of a beating the first time I said Apple is going to the $80s, and trust me, I got a beating," he quipped Tuesday. "Obviously I didn't learn my lesson and I'm coming back for more."

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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