Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Dec 6, 2017 3:15:22 GMT -8
Good morning everyone. RED everywhere this morning as the Nikkei and HSI drop over 2%. AAPL is RED as well, trading at $168.73 -0.91 (-0.54%). In the news: Markets Insider (Business Insider) has CREDIT SUISSE: Tax reform has sent tech stocks plummeting, and now it's time to buy (FB, SNAP, TWTR, NFLX, AAPL, AMZN, GOOGL). AppleInsider has Apple CEO Tim Cook talks Chinese supply chain, censorship and more in interview. Reuters has Apple's Cook optimistic that apps pulled in China will be back. 9to5Mac has Apple mistakenly starts promoting Amazon Prime Video for Apple TV ahead of release. WSJ [$] has A Trump Tax Victory Won’t Be Celebrated in China. Zero sum thinking. Consumer Reports has Final iPhone X Test Results: Top-Scoring Camera and Display But Also Some Flaws. Meanwhile, The Macalope has Useless exercises: Opinions on Apple’s results. Have a great day. Let's make money.
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Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Dec 6, 2017 4:47:50 GMT -8
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bud777
fire starter
Posts: 1,354
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Post by bud777 on Dec 6, 2017 6:48:54 GMT -8
47 billion here, 47 billion there...pretty soon we are talking about real money
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Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Dec 6, 2017 9:16:59 GMT -8
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4aapl
Moderator
Posts: 3,679
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Post by 4aapl on Dec 6, 2017 12:27:55 GMT -8
A little more digging into the 2014/2015 comparison, just for kicks....and ideas. So far, it's really looking very similar to the current AAPL setup. It just really depends on how much driving of the stock price the Jan Leap options will do. I'm theorizing they could do a lot, and keep the stock bounding back here to $170 or so.
In 2014, the stock gained 39% in value. YTD for 2017, it's at +46.5%....not an exact match, but very close. In 2015 at Jan expirations on 1-16-15, it closed at $105.99, down $6 that week on high volume. Prior to this, it's peak close was at $119 on low volume on 11-26/28-14. And then $114 twice in December, on 12-9-14 and 12-26/29-14. In 2015 after Jan expirations, in the just over week before earnings, the stock topped out at $114 (+8, so +7.5%) and closed before earnings at $109 on 1-27-15. 2015 Jan earnings were +28% for revenue, and +43% for earnings/share, YOY. The stock responded, jumping 10 points in 2 days (9.2%). At Feb expirations, the stock was at $129.50, up $23.50 (+22%) in the month since Jan expirations. Topping at $133 (also +22% from pre-earnings) on 2-23-15.
For comparison, on 12-6-12 the stock was at $78, for a 16.8% annualized gain over the past 5 years. Or 3 years from the $110 at the end of 2014, for a ~15.6% annualized gain. So the 1 month gains beat either of those annualized returns.
History might not repeat itself, but it rhymes....sometimes. 2014/2015 had the boost off of the iPhone 6/6+. It's still looking probable that AAPL isn't going to move too much over the next 1.5 months, and then if earnings are good it could take off. I would imagine a slightly more moderate post-earnings move, since AAPL has a higher P/E now than then. But a +5% after Jan expirations and then +10% after great (similar to 2015) earnings seems likely, for an overall 12-15% addition over the likely Jan expiration close (currently looking very probable to be at $170).
As for probability and profiting from this, that's the catch. If the stock had a run to $176/178/180, and you had a high confidence in a pull back to $170 or below, you could sell (and rebuy). Or write calls at the high. Or buy puts when there.
Or you could open a strangle while here, expecting the stock to close between 165/175. Or just 170/170 if you have high conviction. Or myriad other choices, I'm sure.
I'm trying to simplify, and likely would just think about selling the stock if it rose in the short term, and probably only sell what I would like to for other reasons. Then, if things dropped, I could rebuy, or even pick up something riskier.
Either way, it's looking like this could very well be a setup to a great response in late January into February...if things work out well for Apple this quarter like it seems it will.
(And for those not looking to get in or out of their position, if the stock movement does play out this way, maybe it will let them sleep a little more easy, knowing there may be a reason when otherwise it seems like the stock should be taking off)
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Post by dreamRaj on Dec 6, 2017 12:49:04 GMT -8
+1 to everything you said, 4aapl.
My bet for Feb is also on 190. Bought a 100 calls so far.
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