Apple has to hold this key level for it to be a buy, says technician    

Apple was down again in Thursday's premarket and is on pace for its worst quarter in a decade.

The futures price pointed to a 2.5 percent drop at the opening. On Tuesday, shares of the tech giant fell more than 4 percent after HSBC downgraded the stock to hold and key iPhone supplier Cirrus Logic slashed its Q3 revenue guidance.

Apple is now firmly trading in a bear market — down 25 percent from its 52-week intraday high of $233.47.

But some investors believe the downturn is overdone, and that the pullback creates an attractive entry point to pick up shares of Apple.

Mark Newton, president and technical analyst at Newton Advisors, said Tuesday the stock could suffer another two to three days of weakness, but it ultimately remains in an uptrend.

"We've seen a pretty good level of stabilization just in the last week, and the stock has risen almost 8.5 percent off those lows, so that was a real positive," Newton said on CNBC's "Trading Nation." He remains bullish on the stock long term for three key reasons: Momentum on a short-term basis is still positive, the weekly chart is oversold, and finally because sentiment has so rapidly turned against Apple.

"It became not only the trade-war stock, but all of a sudden we're seeing downgrades and people are saying revenue and everything is going down ... after a 20 percent pullback the risk/reward seems favorable to buy into this weakness in the days ahead," he added.

Newton is closely watching the $170 mark, which he believes is the near-term level of support to the downside. Should the stock break below that level, he believes the max downside is $160.

Michael Bapis, managing director of Vios Advisors at Rockefeller Capital Management, also believes now is the time to buy Apple because the stock's fundamentals remain strong. With shares at 13 times forward earnings, he likes the valuation, and he points out that despite the recent pullback, Apple is still higher for 2018. He's also projecting a 12 person earnings growth next year, which he thinks the market is discounting.

Fears of peak iPhone sales has led some investors to believe that Apple's best days are behind it. But Bapis says these concerns are overblown because customers remain loyal to the company and the products it makes, and because Apple is getting an increasing portion of its revenue from software sales.

"Customers are so loyal to Apple ... they're loyal to the ecosystem and that's not going anywhere. There may be a rotation going out of so many devices being sold, but their services business is growing at 25 percent," he said. "Remember in these types of markets when you buy, that's what creates outperformance, so we're going long."

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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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