NEW YORK (MarketWatch) - Shares of Apple Computer Inc. (AAPL : Apple Computer, Inc
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Last: 81.51-0.69-0.84%

9:28am 12/27/2006

AAPL81.51, -0.69, -0.8%) dropped 4% in preopen trades Wednesday after a news report suggested that some company officials may have falsified stock-option documents in the past to maximize profits for executives. The news report, which appeared on the Web site Law.com, said federal prosecutors are examining the documents to determine whether criminal charges should be filed. The story cited "individuals familiar with the case who requested anonymity." The report also said Chief Executive Steve Jobs has decided that he needs to hire his own attorney to deal with the Justice Department and Securities and Exchange Commission. Until now, Jobs has been represented by the company's outside law firm. Apple has previously said that its own internal investigation has found no misconduct by Jobs or other senior executives.

Livermore ever said "be cautious on anonymity"! Nothing is new on the Wall Street. AAPL was noticed on sell pressure long ago before it was upgraded. Today it got a big gap-down. It will be a good timing for shorts to cover in the next day or two. And then short again when it rebounds to $81 as for now $78 is an important support on daily one-year chart.