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Has Apple’s Bullish Momentum Reversed?

On Monday investors were taking a hard look at Apple , which had pulled back sharply after making an all time high of $644 on April 10th.

Although stocks pull back all the time, market pros find the recent decline in Apple more noteworthy because Apple broke below 20-dma on Friday for first time since December 19, 2011.

They fear the momentum may be waning.

And, the reversal may be more worrisome for Apple bulls because of Apple's enormous market cap. Skeptics say it will become incrementally more difficult to move the needle, simply because of Apple's size.

So what’s the trade? Should you buy the dip? Or does the market action suggest Apple has topped out?

Strategy Session with the Fast Money trader

“There’s a change underway in the market,” explains trader Joe Terranova. “Money managers are rotating out of high fliers and into quality.”

That does not mean that Apple is no longer a quality company – it simply means as a strategy, Terranova thinks the stock has run too far too fast - hence the sell-off.

Terranova says the trade is stay neural until the company reports earnings. But he thinks once they do, the results will be better than expected. “After earnings, I expect the trade will be to buy.”

Trader Steve Grasso is more cautious. He says if you juxtapose a chart of Apple next to a chart of Priceline you see that they’ve been selling –off in tandem. He takes the action to mean investors are taking profits broadly in the space in anticipation of a general downturn.

“If you think the market is coming in – as I do – I’d stay on the sidelines.”

Looking at the technicals, JC O’Hara Chief Market Technician Phoenix Partners
tells us “Apple is ok.

He says the stock only had 5-down days yet everyone is freaking out.

“If you had said I wanted to buy Apple on a pullback this is your time. It has not violated any crucial support levels. It’s still above the 50-day ($559 at the time of writing),” he says.





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Trader disclosure: On Apr 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long IBM; Joe Terranova is long MCD; Joe Terranova is long EMC; Joe Terranova is long GS; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Steven Grasso is long CUBA; Steven Grasso is long GERN; Steven Grasso is long HPQ; Steven Grasso is long HSPO; Steven Grasso is long MU; Steven Grasso is long NAT; Steven Grasso is long NYX; Steven Grasso is long P; Steven Grasso is long PRST; Steven Grasso is long VVUS; Steven Grasso is long XRX; Steven Grasso is long ZNGA; Steven Grasso is long ORCL; Steven Grasso is long UAL; Steven Grasso is long LNG; Steven Grasso is short AAPL; Steven Grasso is short QQQ; Patty Edwards is long for clients AAPL; Patty Edwards is long for clients WFC; Patty Edwards is long for clients GDX; Patty Edwards is long for clients GLD; Patty Edwards is long for clients KMB; Patty Edwards is long for clients ERF; Patty Edwards is long for clients INTC; Patty Edwards is long for clients JOY ; Patty Edwards is long for clients SBUX; Patty Edwards is long for clients COP; Patty Edwards is long for clients AMZN; Patty Edwards is long for clients PEP; Patty Edwards is long for clients HD; Patty Edwards is long for clients BRK.B; Patty Edwards is long for clients JNJ; Patty Edwards is long for clients BMY; Brian Kelly is long SPY; Brian Kelly is long IWM; Brian Kelly is long USG; Brian Kelly is long KRE; Brian Kelly is long CAF; Brian Kelly is long GERMAN BUNDS; Brian Kelly is short EUROTOXX 50 FUTURES; Brian Kelly is short BRITISH POUND; Brian Kelly is short SWEDISH KRONE

For Doug Kass
Doug Kass is long XLF
Doug Kass is long BAC
Doug Kass is long C
Doug Kass is long BRK.B

For Sam Isaly
Sam Isaly is long JNJ
Sam Isaly is long ISRG
Sam Isaly is long PFE
Sam Isaly is long FRX
Sam Isaly is long LLY
Sam Isaly is long WLP
Sam Isaly is long PFE
Sam Isaly is long RHHBY
Sam Isaly is long NVS
Sam Isaly is long BMY
Sam Isaly is long SNY
Sam Isaly is long MRK

For JC O’Hara
Nothing to disclose

For Peter Keith
Piper Jaffray usually provides bids and offers for the securities of Home Depot, Inc. (The) and will, from time to time, buy and sell Home Depot, Inc. (The) securities on a principal basis: HD
Piper Jaffray usually provides bids and offers for the securities of Lumber Liquidators, Inc. and will, from time to time, buy and sell Lumber Liquidators, Inc. securities on a principal basis: LL
Piper Jaffray has received non-investment banking securities-related services from or has had a client relationship with Lowe's Companies, Inc. in the past 12 months: LOW
Piper Jaffray usually provides bids and offers for the securities of Lowe's Companies, Inc. and will, from time to time, buy and sell Lowe's Companies, Inc. securities on a principal basis: LOW


CNBC.com with wires.