Notice how it refused to come off 70s on The 5min earlier. When your long gets over 70 RSI, don't sell instantly.
AAPL
- Thread starter Phill Twist
- Start date
Thank you for your response. Very helpful to me. As for #4, I really don't have a bearish opinion but just mentioned it because a lot of posters on this thread were very bearish and if they are correct I should do #4.1. If you're following the earnings and agree with the analyst outlook through fiscal 2019, then there's a case for the stock to increase. Remember, these analysts and mutual fund managers don't rely on charts as much as they do on future expectations of earnings. As traders we mostly follow the charts, and the 200sma is currently a downtrending line on the daily, however AAPL is testing it now. AAPL is also testing the 50sma on the weekly chart. IF it holds and breaks upside, then there's a case both fundamentally AND technically to follow option 1.
2. If you sell 30% of your position from a cost basis of $90, it doesn't "reduce" your cost basis for the remainder of the position. You will have a realized gain for tax purposes (unless it's a tax deferred account), and your cost basis for the remaining shares stays the same.
3. That's true, depending on how many shares you bought, and as long as you're ok with parting with the stock in September for the $100 or the $105 call, and capturing the call premium you sold as a way to "reduce" your cost basis.
4. Why are you bearish on the stock? It just reported its earnings where revenues and EPS were slightly lower, however the outlook for its service business increased and the revenue from its apps store was the "highest ever" according to the press release. AAPL traded almost 3x normal daily volume. It currently has a short float of less than 1%. The majority of shareholders in AAPL are bullish, NOT bearish. You'd have to make a case for why you are "really bearish" on a fundamental and/or technical basis.
5. If you're buying a put then you're effectively making a bearish case on the stock. See #4 above.
As I posted earlier, it's about cost basis and time horizon. You can develop any game plan that emphasizes the technical, or fundamental or a combination of both. As long as you incorporate sound risk management, then it's all good. I cringe at the fact I owned AAPL at $68 about a decade ago. The trader in me sold the position in after hours because it gapped to the mid $80's and I thought (incorrectly) that I was a hero. I've been in/out of the stock and options several dozens of times since then, for short term trades. However THAT original position was one of the best buying decisions for an investment on an absolute percentage return. We all know AAPL hit $700 and the shares split 7 for 1. I can't do the math, because I can't count that high.
Overall, I think AAPL is a good long term holding due to low PE and the rapidly increasing service business. But I am a swing trader, so I am more worried about the near term.
I really like your analysis of the various options. Thanks again.
$45 was an incredible cost basis. It was still a decent trade at 40% return. But damn, it was also a potential 17 bagger. Who would have thought CMG would have sold that many burritos, lol.
Sure, no problem. It's not a sell simply "because a lot of posters on this thread were very bearish" for the same reason it's not a buy if a lot of posters were bullish. There are two sides of every trade, and since nobody can really predict the future with absolute certainty, it's just a matter of probability analysis.
The trendline break is key. If you're a swing trader, just watch the level, and exit according to the price action, the fundamental growth trajectory, and plain old gut instinct, lol.
http://finviz.com/quote.ashx?t=aapl
Yes, the P/E is well below the S&P currently and the dividend yield is slightly higher. The service business seems to be the driving factor of why the analysts are bullish, especially given it's a high margin business.
Here's an article regarding fundamentals and whether AAPL is a value trap as some have mentioned. It's over a month old, but still good reading.
http://www.investopedia.com/articles/investing/062116/did-apple-stock-become-value-trap-aapl.asp
The other anticipation is the iPhone 7, with an approximate release date in early September. There's always enough hype regarding AAPL, where the news feeds will show the diehards waiting in line for hours to buy it.
Here's an article about the upcoming iPhone 7:
http://www.itechwhiz.com/2011/08/apple-iphone-7-release-date-and-price.html
The bulls regains a full control but the bears are at the backyard and not giving up easily.
Why it should go to $110?
Thanks for the input.