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Here's why there's a tremendous buying opportunity in Apple

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.

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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.

Brian Sullivan

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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