Apple shares are doing something very unusual

A falling apple was said to inspire Isaac Newton to articulate the law of gravity. More recently, stagnant shares of Apple could have inspired his first law of motion: "Every body perseveres in its state of rest ... unless it is compelled to change that state by forces impressed thereon."

In the past few weeks, the tech giant has been glued to the $120 level. The stock has closed less than 1 percent away from $120 in each of the past 11 sessions. It has closed less than 0.2 percent away from $120 in each of the past six sessions. And in two of those sessions, it closed at $120 exactly.

The stock didn't even see fit to fall Tuesday after Barclays analyst Mark Moskowitz downgraded it to equal weight and cut its price target, complaining that the company's "growth rebound could be elusive" given the dearth of "needle movers." Apple shares shrugged, logging a 0.09 percent decline on the session, though it did underperform the major indexes.

In part, the Apple stagnation reflects the stasis seen in the broader market, which before Tuesday had failed to log a daily move of more than 0.4 percent for 2 ½ weeks. But there is something special about the $120 level.

Last Friday, a huge bundle of options expired on Apple, and the most popular striking price for those options was $120. A large options holding tends to "pin" a stock to the most relevant level, which helps explain why the stock closed on Friday at $120.00. Since then, investors have apparently seen little reason to push the stock far from this well-trodden level.

"You're seeing an influx of buyers and sellers at this level," options trader Andrew Keene of AlphaShark observed. "But earnings will move the needle a great deal."

The company is scheduled to report earnings Jan. 31.

Regardless of which way the company moves on its numbers, "we still like it as a long-term play," Erin Gibbs of S&P Global said Tuesday on CNBC's "Trading Nation."

With solid earnings growth and a moderate valuation, "this is a solid bet. You're not going to lose your money here, and I actually see this as a solid entry point."

Examining the charts, Chris Verrone of Strategas Research Partners opined Tuesday that the stock is currently experiencing "a resumption of a longer-term trend" higher.


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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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