Apple Inc shares are deteriorating in a way not seen since the financial crisis. The iPhone and iPad maker had been a stalwart since the spring of 2009, when the market entered recovery mode, but its recent decline has accelerated, pushing the stock through its key 200-day moving average.
Shares are now down 2.2 per cent on the year to their lowest level in almost seven months.
The decline may be in part be linked to worries about reduced growth in smartphone sales in the wake of disappointing results from Research in Motion.
In the past, pain at other companies translated to more fervent belief in Apple's stock. Some analysts say Apple may be oversold, in the short term.
"The technology sector as a whole has been very weak. There is some concern about demand in the second half of the year. The mobile internet space has been very weak," said Channing Smith, co-manager of the Capital Advisors Growth Fund, which owns Apple shares.
He sees the stock is in a "no-man's land" right now.
Shares broke a key support level on Monday, confirming its close below the 200-day moving average for the third straight day. Trading volume was heavier than average, which is also worrisome.
Before this past Thursday, the stock last closed below that long-term trend line in April 2009. Back then, Apple and the rest of the market were bouncing back from lows hit during the credit crisis that dragged the global economy into recession.
For the last few months, the market has been weakening, but the decline has sped up in June, particularly for high-flyers like Apple and Google Inc.
"Its relative strength versus the S&P 500 has been very weak, causing concern moving forward," said Andre Bakhos, director of market analytics at Lek Securities in New York.
Shares closed down 1.54 per cent at $315.32, their lowest since late November, with a jump in volume of more than 60 percent from its 50-day average.
"Technically, it is telling you that the weakness is building in the stock," Bakhos said.
Many market participants and technical analysts say the line in the sand that will decide the near-term fate of the market lies at the S&P 500's 200-day average, now at 1,259.80.
The Nasdaq 100, another key index, is already below its 200-day moving average, and the breakdown of equity market leaders is also problematic for investors expecting a correction.
The S&P on Thursday bounced at its 200-day average, and has since posted three days of gains.
Apple shares broke through the 38.2 per cent Fibonacci retracement of the stock's advance from late August to its all-time high of $364.90 in mid-February. Investors watch these levels as points where clusters of buying support or selling pressure may arise.
The stock was also on track to post its largest percentage drop in a month since November 2008 as momentum has deteriorated.
From a technical perspective, the stock could be considered oversold in the short-term, which means buyers could emerge soon.
Also, weekly charts suggest more underlying strength in the shares and that the recent weakness could reverse.
"Depending on your perspective there could be a quick short term oversold bounce, or on the weekly chart, on a longer-term view, here's where you want to buy Apple," said Jay Lefkowicz, technical strategist at Concept Capital in New York.