A place for Apple 3.0 subscribers to share their ideas.
To get things rolling, here’s CNBC’s Trading Nation last week on whether it’s time for a breather:
Apple having best month in five years, but it might be time for a pullback from CNBC.
Disclaimer: Since I’ve never owned or traded Apple and gave up trying to beat the market in anything many years ago, I have nothing to add. Don’t blame me if you drain your IRA doing something you read about here.
I don’t believe in a meaningful pullback this late in the year.
Pullback-time ist between April an August, the time of the weakest iPhone-sales….usually.
This year was totally different, I absolutely buy the theory of a paradigm-shift when it comes to AAPL, thanks IMHO to Warren Buffett and his theory about “imaging iPhone sales this quarter”.
AAPL is at or near its alltime high and I think this will be the base for the next 6 months.
A 10-15% pullback…..not this time.
From Gina, “Apple is the best value”. Skip the rest.
Seriously, Matt said “due for a pull back”. Later he said, but might go higher. Net: He said nothing. Gina elaborated that market sentiment has really changed.
The September announcements will likely push AAPL to new heights. The pull back may have already occurred last week..Buying calls looks like a good bet.
The pullback predicted by the Historic Trend didn’t happen last week. Instead, AAPL plowed through with continued investor sentiment strength. How much further will that sentiment carry AAPL?
Well, the Historic Trend is indicating a pullback starting Tuesday or Wednesday after testing a new all-time high ar0ound $219, with AAPL shedding as much as $7.00.
Except for brief periods, AAPL has not followed the Historic Trend since August 15 when AAPL was predicted to pullback. This is very unlike previous periods wherein I traded very successfully using the Historic Trend as an entry/exit guide. Last quarter AAPL followed the Trend more closely than any other period since I began charting it with a Standard Deviation of $2.41. The Standard Deviation for this period is currently $4.65.
I am going to trade this predicted pullback, but with a small investment ($5,000) in SEPT Wk 1 $217.50/$215 Put Spreads at about 75¢. Expecting AAPL to bottom next week I plan to reverse course with Call Spreads with a SEPT expiry. However, I expect to Close that position early.
My goal is to make 70% ROI (with upside potential) on each trade.
“I am going to trade this predicted pullback”
Inquiring minds want to know. With Apple up again today and touching some all-time highs, are you sticking with the pullback thesis?
The simple answer is yes.
Because AAPL went up again yesterday vs plateauing, I changed my order from $215/$217.50 Put Spreads to $217.50/$220 Put Spreads at 90¢. That order (100 contracts split between two accounts) was filled at the Open this morning.
They are currently (9:40 AM EST) up 8¢ ($800).
Currently, AAPL is #2 on the Top 100 Selling on Strength list compiled by the WSJ. With over half the trading day behind us, the amount of outflow is very small (less than $100 Million).
Typically, when AAPL shows up on the Buying on Weakness or Selling on Strength lists (always in the top 10) the dollar amount involved exceeds $300 Million.
Selling on Strength today finished at nearly $450 Million. Could this be a sign of weakness in AAPL?
I would agree with Fred that Gina is much closer to the mark. The present valuation of many stocks has come far more from momentum over the last few years than from the underlying fundamentals of the companies. Thus, having been bypassed by the momentum players in favor of more “exciting” stocks, the underlying fundamentals of Apple are shockingly undervalued, even with the shares once more creeping towards a 20 P/E.
Now, oddly, some of the recent AAPL valuation increase may in fact be momentum driven, and it is that constituent that may be most likely to fuel a pullback in the near term, if anything can. But it’s failed repeatedly since the last earnings report to do so, and the reason, IMHO, is what I have been calling the Buffett Effect: Long term investors have been following Mr. Buffett into a stock that is both safe and a bargain. So when the short term momentum players cash in, not only is there a flush Apple there to take their shares out of play, but there also is Mr. Buffett and his cohorts. Thus, even when Apple is in it’s quiet period, and perhaps even moreso then, the Buffett Effect tempers the inevitable attempt to stampede AAPL.
Meanwhile, Apple’s business, against all expecations, continues to grow at a healthy clip, when viewed over the course of multiple years. And there is always the distinct possibility of Apple instigating yet another paradigm shift, given it’s unique culture, in which case it’s present cash generating capacity could grow dramatically.
Bottom line: AAPL is a very good long term bet that, at the moment, happens to also be a very good short term bet, thanks to the stupidity of earlier markets that failed to recognize it’s true value.
there is always the distinct possibility of Apple instigating yet another paradigm shift,
I think that paradigm has already begun, the market just hasn’t recognized the importance of iPhone X, iPad, AirPods, Apple TV, iTunes Store, Apple Music, HomePod and Apple movie content all working together for an unparalleled user experience (TV and/or mobile).
I think subscription revenue is going to explode in 2020.
Just wondering, as Apple and Buffet buy AAPL without selling does that reduce the stock available to short term traiders? Long term investors may not be willing to sell cheap.
It isn’t just Apple and Buffet that are reducing the float, ALL long term holders reduce AAPL’s float. It’s just that Apple and Buffet are recent buyers of the equity.