Shares of Apple Inc. (Nasdaq: AAPL) are tracing a negative technical pattern called a double top, and maybe a reverse head and shoulders.



Chart Courtesy of StockCharts.com



You can get bogged down in naming the pattern. And in the end it doesn't really matter what you call it. A double top means that the stock is failing to make a new high on its second attempt to do so over a period of time. A head and shoulders top means that a stock made a top, then some time later it made a higher top, but now it's making a lower top.

What's important is that the stock isn't going up. Instead, it's stalling. Or at least it seemed to be stalling. Things could easily change, especially if the market turns up in the next few days, if Apple joins any potential rally.

Here's what's important. Apple has been weak enough lately to have traced a negative chart pattern. That means that more money is coming out of the stock than is going into the stock. And that means that if you hold the stock, you need to be paying attention to its activity at this point.

More important is what Apple does in respect to the market. If the overall market starts to rally and makes a meaningful new high, and Apple doesn't keep up, there is clearly a problem with the stock.

If it recovers well enough to keep up, then that would be a positive. The bottom line is that Apple is not a market leader at this time. And that's different than things were a few months ago.

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