Apple attempts to bottom at the $505 area, levels to watch

The stock has touched the $505 area as support three times within the last month. It appears traders are attempting to build a base of support there, and to try to rally the stock from that level. So far bounces off $505 have been getting progressively narrower in range. That could suggest that while there is support at $505, there isn't much conviction to push shares higher. A continued basing at $505 would be bullish. A breakdown below $505 however would be quite bearish.When levels that are presumed to be resistance or support are breached, reactions tend to be considerably stronger. The bearish pennant pattern remains active, with potential downside to $460 possible. Resistance is at Friday's high at $518.13.

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