3SOF

AAPL is over hyped in my opinion (the great earnings were factored in for most of this run up already). The Nasdaq is going to drift lower I think in the next few months and take AAPL and the rest with it for the ride. Tomorrow should be interesting, I say tomorrow AAPL closes the day somwhere between 93-96. Tomorrows trading will definately be very volatile. I would say the overall market perception will be the deciding factor if it closes green or red.

Wow the selling is relentless in AH now trading 93.90s. I would like to see the trading tomorrow.

What a difference a day makes....

Looks like despite a laod of upgrades, AAPL is set to get killed and this could well be a trend reversal point.  Techniacally, yesterdays candle was a bearish engulfing, and todays gap down confirms this.  In addition it looks like it has formed an island top reversal.

Momentum is clearly on the short side, and unless we get a heavy rebound today, I wouldn't be surprised to see it fall to around/below 90.  Tomorrow is options expiry and there has been huge options interest in the stock, so MM will be trying to eek out all they can from the options side.  I have already sold my long position in the PM and will get what I can for my Feb calls.  Aiming to sell my Jan 90 puts "at the money" today.

Outstanding quater revenue but guidance came in low that's the problem...
There is strong support @ above 86.00 it should bounce from there

What a mess...

AAPL got absolutely creamed today, really quite incredible, but then again the whole market took a beating.  Right now I'm just trying to pick up the pieces.  Actually not quite as bad as I hought, but if I had palyed it safe (i.e. not palyed earnings at all) I would be a lot better off right now than I actually am.  Sold my stock PM just under $93, which turned out to be a good plan.  In the end I still made a gain of 11.5% on it.  but I had started to get frisky with options - bad idea.  Made a lot on the way up, but have pretty much given it all back overnight.  Now i realise what a high risk strategy I was taking there. 

For now, I think we will see further downside tomorrow, AAPL rallied after the initial bottom, but then proceeded to drift back down to the previous LOD.  Right at the end of the day, this brok and it closed at a very unforgiving 89.07.  It is currently below $89 AH.

Terliso may be right, we could see some support at $86-86.50.  But come to think of it, this is exactly what happened to AAPL last year - huge run over christmas and new year into Macworld (Intel iMac release) then blowout earnings and a 6 month tank.  I believe they got loads of upgrades then too.  But it all goes to show, you just have to follow the money, and the money is definitely on the short side for now.   

ST ... buddy....

Buying and selling options... checking volumes/resistance & support etc. You're starting to sound like an options trader ... BUT YOU'RE NOT ACTING LIKE AN OPTIONS TRADER!!!! You had 2 really great option trades on Apple ... but I think you lost your mind!

When you bought your 90 calls ... and they gained 76% ... THAT was your cue to leave! Let's say ... Apple was selling at 90 ... and it went up to 160 ... you would have taken the money off the table ...right? THAT'S 76%...

Not sure what you were doing with the puts, but puts were a brilliant idea this week. What happened??? Did you get a bad case of the greedies? 
-Samantha

OK, I'll try and explain what I was up to (and advise other people not to do the same!!)

So I bought the Feb90 Calls last week before Macworld when AAPL was trading at around $85.  I sold them this week (in bits) for an average of a 107% gain.  So really not so bad at all.  My problem was that I then bet the house, and picked up some Feb 105 calls (making sure I was only risking the profits I had already made), anticipating an upside move, and hedged them with Jan 90 Puts (which expired yesterday).  What I failed to anticipate was that the pre-earnings volatility was puming up the price of both of them.  So when earnings were released and the price dropped, the price of the Feb 105 calls crashed, and I sold them immediately, but what I didn't anticipate was that the Jan90 puts also crashed!!  I bought them at .90 and the price dropped 3-4 points and they were trading between .30-.60!!  Of course, I realise now I should have hedged with Feb 90 puts, as their price remained stable because they weren't on the verge of expiry.  Anyway, on the plus side, I was only risking profits, and I still made about 12% on the stock.

So, the moral of the story (for me at least) is that options are VERY volatile and VERY dangerous.  I may continue to play with them a bit, but only to leverage situations where I am VERY confident of a short term price movement, and only with very small positions (i.e. a few hundred $).  The time factor is very tricky to play, and means that if I am looking to hold them probably for a max of a few days.

Other plays I have made recently (calls on AMKR and puts on DIVX) both worked out well for 50%+ short term gains, but as you said, when you see a nice profit on them, take it!!!

Warming up for another run?!? 

I think we could have a reversal here too, look for the break of 87.50, was big resistance on Monday.  I think it might be time to get back into AAPL once again.

By the way, expectations are up for stronger pro level Mac sales next Q (but maybe not this one) on the back of Adobe's CS3 release:

http://www.nationaldefensemagazine.org/issues/2007/Febuary/Militaryservices.htm

There are a lot of bears out there who think Apple will see the 70s again, but I'm skeptical of that.  The recent correction happened purely because there was too much hype in the stock and earnings were the excuse for a sell off.  All the analysts know (and have been saying) that iPod sales were excellent, Mac Sales growth (on a yoy basis) was excellent, revs were down in the retail stores but only because most holdiay revenue was iPod related and they sorted out the distribution problems they had last year (which meant the only place you could reliably get an ipod was at an apple store), and actually retail segment Mac ssales were stronger.  Rev forecasts for this Q were weak, but only because Apple guide very conservatively and then beat their (and the analysts) expectations significantly.  They've done it every one of the last 8 quarters.
Revenue projections for 07 and 08 are strong and getting stronger.  There is no question that the upgrades that came out on the back of earnings are for real, its just a shame they all came out at a time when the stock was in free-fall.

I'm back in and going long here.  Technically we had a gravestone doji on Monday, followed by a second doji yesterday.  The pivot is 87.52 (a penny above Mondays high) and the 50MA is at 87.82.  A move above these levels would leave me thinking we are going to attack the 90s again.

Chart update for this Big Dog

New york is one of the busiest street on the planet, so watch out!


New York may ban iPods while crossing street

NEW YORK, Feb 7 (Reuters) - New Yorkers who blithely cross the street listening to an iPod or talking on a cell phone could soon face a $100 fine.

New York State Sen. Carl Kruger says three pedestrians in his Brooklyn district have been killed since September upon stepping into traffic while distracted by an electronic device. In one case bystanders screamed "watch out" to no avail.

Kruger says he will introduce legislation on Wednesday to ban the use of gadgets such as Blackberry devices and video games while crossing the street.

"Government has an obligation to protect its citizenry," Kruger said in a telephone interview from Albany, the state capital. "This electronic gadgetry is reaching the point where it's becoming not only endemic but it's creating an atmosphere where we have a major public safety crisis at hand."


Tech-consuming New Yorkers trudge to work on sidewalks and subways like an army of drones, appearing to talk to themselves on wireless devices or swaying to seemingly silent tunes.

"I'm not trying to intrude on that," Kruger said. "But what's happening is when they're tuning into their iPod or Blackberry or cell phone or video game, they're walking into speeding buses and moving automobiles. It's becoming a nationwide problem."

However, the daily chart suggests a short term reversal...

AAPL seems to have a lot of upward momentum today

Quote from: ScottishTrader on February 07, 2007, 12:48:44 PM
However, the daily chart suggests a short term reversal...

AAPL seems to have a lot of upward momentum today

Daily chart seems bullish but in reality it is not, weekly chart is already in bearish mode. as you can see in the weekly histogram it's already ticking down in the negative side along with the MACD bearish crossover that suggest AAPL could go down further.

AAPL is looking shaky here once again, 3 ugly days in a row as it struggles between 87.40 support and 89.00 resistance.  My guess is that with the general market weakness (provided the market doesn't rally hard next week) we will see AAPL break down from this level.  More important is whether this breakdown is small and managed, or whether it turns into a full-blown breakdown a la this time last year.  $86.50 and below that, $84 both look like important support levels, and if the market goes south, we could see 77.50 in no time.  Right now looking at the chart, beyond a strong move into the $90 range (which seems like it would need some sort of positive impetus/news), AAPL is looking pretty toppy.

However, there is no doubting their growth story and the fact that it is set to continue.  WR Hambrecht & Co just started coverage and initiated with a buy rating and $110 target.  The report is attached, and worth a look if only for their very detailed sales breakdowns and comparison information.   

Personally I doubt AAPL will come out guns blazing this Q, like they did last, but they are likely to beat their own guidance (as they always do) on lower component costs and supposedly strong shuffle shipments this Q should bouy their iPod numbers, which are normally seasonally weak this Q.  However, next Quarter should see potential upside from AppleTV, and if they release Leopard early/on time (not 100% sure if this will happen though, as they still have a lot of bugs to iron out of the OS - not as bad as MSFT, but hey), and they may also get a boost in high end desktop shipments from pent-up demand associated with Adobe's CS3 release.  Of course 8 Core Mac Pro's would definitely butter up the pro users to plump for one too.  The summer Quarter is when we will really see things kick into gear - iPhone, Leopard, presumably other irons in the fire and ongoing Mac conversion/loyalty should move things up a notch.  As Hambrecht say in their report, AAPL's multiples look high when comparing them to other PC manufacturers, but with the way they are repositioning themselves as a company, and their Wow factor, the really need to be evaluated in terms of other high tech/media companies like RIMM, YHOO and GOOG.  These are the companies that AAPL's growth story is comparable too, not the likes of DELL.

looks to me like AAPL has formed a cup & handle here as it is poised for earnings.  Could this be the catalyst to finally get AAPL off to the races???  The only caveat with this pattern right now is the lack of volume on the right hand side of the cup.

I'm not quite sure if I want to make this earnings play - it is likely that earnings will be good, possibly very good as there doesn't seem to be nearly as much slowdown from the christmas qurter as they usually have.  The street is expecting .64 eps on $5.17B in revs,  and while it is entirely likely that they could beat this handily, the streets reaction to AAPL's earnings is often quite contrarian.  Still, I like the technical setup and it might be worht a small bet that AAPL follows through on this pattern and we see it finally break out and start testing new highs.  $100 would be very nice to see!!!