Thank you. Actually make sense. After your post, I made a list of steps I could take, their pros and cons. Here are some to consider: 1. Do nothing, just let the profit ride. 2. If I sell 30%, it reduces my cost basis to $86 which gives me better profit protection but reduces future profit potential. Or sell 50% which reduces basis to $83.... 3. Another alternative is sell a call option against the stocks. A Sept 16 $105 C write nets me $2.12 and effectively lower my cost to $88 but then I cap my gain. Or a $100 C which net me $5.05 but also caps my gain.... 4. However, if I am really bearish, I am better off just take profit and find something else to invest in? 5. Or buy a put which though increase my cost basis protects my profit when AAPL goes down? But a Sept 16 $105 put costs $3.5, or a Sept 16 $95 put which only costs $0.50.... So many choices and really a complex decision if I lay out all the possibilities in a decision matrix. I am wondering what is the collective consensus on AAPL here?
I say range-bound between $105 and $90....forever. Great credit spread opportunities here with options.
Apple has a lot of loyal investors and despite drop in revenue and sales number for second quarter in a row, investors were able to push the Apple up. That is very good. The bad news is that the AAPL up-move was basically during the after market hours on July 26th of 2016. Since than it is side-way. Apple loyalists were not able to extend the up-move beyond 7/26 overnight trading. Despite the strong increase in volume on 07/27/2016, Apple's Bears were able to halt advance. Over the past three trading session, the $104.35 high set at the market open on 7/27/2016, was broken only once at the market open on 7/29/2016 when AAPL touched $104.55.
Its a tricky play at this point. Dangerous waters for swing traders. The only clue retail schmucks like us will be able to ascertain is in the volume. It could soar, or it could tank. Dangerous waters. Best to be on the sidelines as a swing type. Let the elephants do their thing and then play it.
Zandy - the Apple lovers are like a herd of cattle being sent to the slaughterhouse. This is no longer a growth stock.....it's just another tech behemoth....that has run out of new innovations.
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.
The market is definitely easier to play with the algo's running the show. Technical reason for the rise: huge gap up on earnings with the gap holding 2 days after. Simple fundamental reason why AAPL is going higher: services.