Shares of Apple Inc (AAPL) have broken short-term support and are on the way to testing a critical longer-term level. This is information worth knowing because analysts have yet to react to the weakness. According to Zacks, 17 of 21 analysts (81 percent) still rank Apple with a "buy" rating. Below are the daily and weekly charts.

Chart Courtesy of Thomson Financial

Chart Courtesy of Thomson Financial

These are the same two charts discussed earlier this month after Apple failed to rally on the presentation by Steve Jobs. Then we saw the shares were flirting with breaking the lows from late-July/early-August. Those have now been firmly violated and the stock is honing in on the late-February bottom.

One point to note about the daily chart is that the short-term Relative Strength Index (RSI) is hitting extremely oversold levels. This argues that we should see a bounce sometime soon. The fact that this is occurring as the stock nears longer-term support also seems to bode well.

However, want I think is important to point out is that the points above are theoretical. Yes, the stock "should" bounce from an oversold condition so the more interesting reaction would be a lack of a bounce. In other words, a failure to bounce when it should be likely is a sign of strong underlying selling pressure. That would be a red flag that perhaps the market is changing its view on this story stock. If that is the case, downgrades are a potential risk to be cognizant of...