ETF Trends
ETF Trends

AAPL remains in focus, as it is trading with a $109-$110 handle this morning for the first time since mid-November, and David Chojnacki points out key support in the stock at/near the $107.50 level.

The stock topped out in late November as high as $119.75 until petering out to current levels. For perhaps the third or fourth straight year, AAPL itself as widely held and related ETFs where it has a heavier representative weighting like IYW (iShares U.S. Technology, Expense Ratio 0.46%, 19.98% weighting), XLK (SPDR Technology Select Sector, Expense Ratio 0.16%, 17.22% weighting), FTEC (Fidelity MSCI Information Technology, Expense Ratio 0.12%, 16.20% weighting), IXN (iShares Global Tech, Expense Ratio 0.47%, 15.28% weighting), VGT (Vanguard Information Technology, Expense Ratio 0.14%, 14.74% weighting), and QQQ (PowerShares QQQ, Expense Ratio 0.20%), 14.69% weighting) among others remain in focus heading into a calendar year’s end for no other reason than for potential “tax swap” purposes where it makes sense for individual holders/clients.

Thus, we expect to see heightened volume in the stock itself throughout the rest of the month and a potential ripple effect across ETFs where AAPL has a heavy market cap weighting. After all, this is the largest stock by market capitalization in the S&P 500 Index with an approximate weighting of 3.86%, trumping the next closest weighted member which may surprise some, MSFT (2.14%).

Most will remember when AAPL and XOM would bump each other out of the number one slot in terms of their weightings in the S&P 500 Index and linked ETFs, and now XOM thanks to this prolonged slump in Oil and related Energy stocks only comes in at number 3 (2.09%) weighting.

The bottom line is that AAPL has been under selling pressure in recent sessions absent any real catalyst in the stock (quarterly earnings are not expected until 1/27/2015, more than one month out) and it will be interesting to see where stop losses may play out in AAPL stock heading into year’s end, as we believe that trading in the stock and related ETFs will continue to be very tax sensitive for like we said, perhaps the third or fourth straight year into year’s end.

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