JC Parets is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.
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Apple Inc. (NASDAQ: AAPL) has dropped more than 15 percent since its mid-July high.
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Eagle Bay Capital Founder JC Parets said that he is waiting for a rally in the stock before he becomes a "very, very, very, very aggressive seller."
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Parets argued that a stock price around $120 per share would be the perfect entry point for a short, without predicting whether the stock ever reaches that level.
With markets seemingly unsure of where the next direction will be, Parets argued that traders should pick targets and trade from there. In Apple, Parets suggested that the story has changed from earlier this year. He recalled being long the name in January and February, before the stock hit Eagle Bay's upside target. Since then, he has been on the sidelines.
Parets suggested that if the stock – currently trading around $112 – pushed up towards its 200-day moving average, he would become a "very, very, very, very aggressive seller." The 200-day moving average is at $124.27, but Parets said he would look to get short around $120.
Parets said that the 200-day moving average was formerly support, and should become strong resistance should the stock move higher. Particularly, Parets said, since there hasn't been any bullish momentum divergence during the stock's 10 percent gain from around $100.
This week, Apple announced its next suite of products, from a new iPad Pro to the next generation of iPhones, the 6S. The stock has drifted lower.
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