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.

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 CNBCand 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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