Apple shares are falling off a cliff, but that could present a very attractive buying opportunity according to one trader.
"I'm going to use this weakness following a disappointing earnings report to acquire the stock," Todd Gordon told CNBC's "Trading Nation" on Wednesday. Apple was down 6 percent midafternoon Wednesday, and tracked for its worst session since 2014, after reporting its first quarter-over-quarter revenue decline in 13 years.
The move took more than $40 billion in market cap off the world's largest company, and weighed heavily on the tech sector. The downfall also sparked a heap of fury on Wall Street, igniting a slew of analyst downgrades and price target cuts from the likes of Oppenheimer and Macquarie. Goldman Sachs also removed the tech giant from its "Americas Conviction Buy" list.
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But from a technical perspective, Gordon noted that the declines have Apple stock sitting at a key area of support in the $92-$96 range. And, as he explained, it also happens to correspond with the next leg in an Elliott Wave triangle formation. This type of structure refers to a stock's tendency to trade in a repetitive cycle. In the case of Apple, Gordon noted that the stock sold off sharply, then bounced off of support, rallied and so on and so forth.
"I am long the stock at $96.50," said the founder of TradingAnalysis.com. "[I think] we should be able to put in a low in Apple ... and move up to $105," he added.
Despite the dismal performance Wednesday, the stock is still widely loved on Wall Street. According to FactSet, of the 47 analysts who cover the stock, the average rating is a "buy" with a $126.34 price target.
