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What's going on with Apple and Google?

As Apple and Google have traded places repeatedly around the $600 mark this week, there has been much speculation over a possible correlation between the two tech heavyweights.

We first noticed what could have been shareholders moving out of AAPL and into GOOG last Wednesday , but Google's shares tumbled the next day after the company announced its unorthodox stock split. That news sent shares from over $640 to $601.66 in subsequent sessions.

Apple then experienced its own plunge on Monday when it broke below the $600 level, falling from over $610 to an intraday low of $578.25. The next session, however, AAPL regained almost all of those losses while GOOG remained near its lows.

So what does all this mean?

Interestingly, even though Google has yet to recover most of its lost ground, it can be argued that its shares have held more firmly than Apple's. The reason is primarily that GOOG attracted a consistent buyer on Monday, Tuesday, and most of Wednesday.

AAPL, meanwhile, rose from below $610 in yesterday's pre-market to over $620 but failed at that resistance level and dropped sharply to the $603 level before eventually closing at $608.34, down 0.22 percent on the session. Although GOOG also finished lower, down 0.35 percent to $607.45, its intraday action was much less volatile as it mostly traded in a relatively tight range between about $605 and $612.

Moreover, the three-day chart below appears to show an inverse correlation between the two names (Google is shown in blue, Apple in purple). This begs the question of whether there might be some kind of mini-rotation between Google and Apple going on, though its direction and consistency remain unclear.

If buyers are switching to GOOG in the belief that it is more stable than AAPL, the search giant could see its shares rise to the $620 level that Apple saw at yesterday's high and possibly even test the $630 area. Conversely, if Google's $602.70 support level fails, then lower prices appear very likely.

That downside level is coincidentally the same for Apple. After that, the next support areas for both names are $600 and then $595. For AAPL, the $580 level is the pre-market launching point for Tuesday's spike higher.

GOOG vs. AAPL
GOOG vs. AAPL



(Chart courtesy of tradeMONSTER )

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