APPL - Short Term Bear - Swing Trade Continuation
Here's the details of my trade Short on AAPL....
I previously shorted APPL for a trade from $255 to $244. Unfortunately I did not fully maximise my profit. If you watch the video I explain where I missed a signal that could have allowed me to gain more profit. Nonetheless, I made a profit! So let's celebrate that. The original pattern and trade is still in tact and therefore this video explains the continuation pattern I am currently trading.
Daily Chart:
- QQE Signal Short
- Divergence on the RSI
- Cross down on the MACD
4hr Chart:
- QQE Signal Short
- Strong Divergence on the RSI
- Cross down on the MACD
Fundamental Support:
- PE Ratio overvalued at 40, historic PE ratio range 12-28 excl Covid 2020
- Buffet has cut Berkshire Hathaways stake in Apple by 60%
- 2 consecutive years of flat YoY revenue, with declines in Iphone, Wearables, Ipad, Mac offset by YoY growth in Services
- Flat YoY Revenue in USA, Asia Pac, and Japan, with declines in Greater China
- 2 consecutive years of YoY Net Income decline, EPS benefit from share buybacks of 1B since 2022
- Operating Margin improvement, however primarily driven by product mix (decline of core products and growth of services business)
Previous Developments & News
- Next significant economic data is ADP employment report Wed Jan 8th and Unemployment Rate Fri Jan 10th
- A lower or higher employment figure than forecast could move the market and is a potential risk to the short position if employment figures are positive
- However, inadvertently, higher employment figures will reduce the likelihood of FED rate cuts, offsetting some of the upside potential
This was commentary I put in previously....what ended up happening? The unemployment report on Friday ended up being way above forecast 255k vs 155k forecast. Sending treasury yields higher and the market lower. This is in line with my comment about higher employment figures, although it may sound rosey, it's further reducing the likelihood of the FED reducing rates and increase the possibility of higher inflation. The market does not like that
Target:
- Previous ATH at 236, if it breaks this level than there's opp to move down thru 232, to as low as 221
- Stop: A break above $244
- Possible profit taking at 50 day moving average near $237-$238 range
- Previous declines ranged from 8-15 days to reach short term lows, estimating similar timeframe with a possible break of support line, retest, and further decline
Risks:
- The rollout of Apple Intelligence sparks strong Christmas sales and upgrade cycle for Iphone 16
- Investor optimism for Apple Intelligence drives continued buying in AAPL
- A bounce off support and continued move higher
Overall:
AAPL has rolled out Apple Intelligence in several major markets with some features still coming soon. It would be an understatement to say that the development, features, and rollout have be clumsy at best. Not only has the rollout and announcements been underwhelming, but Apple looks to be playing catchup with technology competitors have already well established in the market.
Apple continues to be a loved brand worldwide, and there's no denying the brand loyalty is still strong, however lagging technology, premium prices on their products, high PE/valuation with flat to declining revenue and profitability. Until Apple can either reclaim it's technological advantage by becoming a leader again in the market, or reposition it's product offering and pricing to drive demand, it's difficult fundamentally see why the stock is worth the PE with so many other companies in market with new innovation and growth potential comparatively.
This isn't to suggest Apple will collapse, but a correction technically and fundamentally is warranted near term with broader economic risks and technological missed expectations that could warrant lower prices.
My Position:
3 Put Options
$235 Strike, Current Price $242
Expiration Friday Jan 17th
Average Price is $1.30 a contract
Investment $400
Target $3.00-$10.00
Stop $.65
Potential Loss -$200
Potential Gain $400-$2600
The reason for the wide target range is because if APPL breaks through the 50 Day MA and the previous ATH, that is very bearish and although it may retest that level, it could create quite a fall and I would look to maximise my trade at that point.
I previously shorted APPL for a trade from $255 to $244. Unfortunately I did not fully maximise my profit. If you watch the video I explain where I missed a signal that could have allowed me to gain more profit. Nonetheless, I made a profit! So let's celebrate that. The original pattern and trade is still in tact and therefore this video explains the continuation pattern I am currently trading.
Daily Chart:
- QQE Signal Short
- Divergence on the RSI
- Cross down on the MACD
4hr Chart:
- QQE Signal Short
- Strong Divergence on the RSI
- Cross down on the MACD
Fundamental Support:
- PE Ratio overvalued at 40, historic PE ratio range 12-28 excl Covid 2020
- Buffet has cut Berkshire Hathaways stake in Apple by 60%
- 2 consecutive years of flat YoY revenue, with declines in Iphone, Wearables, Ipad, Mac offset by YoY growth in Services
- Flat YoY Revenue in USA, Asia Pac, and Japan, with declines in Greater China
- 2 consecutive years of YoY Net Income decline, EPS benefit from share buybacks of 1B since 2022
- Operating Margin improvement, however primarily driven by product mix (decline of core products and growth of services business)
Previous Developments & News
- Next significant economic data is ADP employment report Wed Jan 8th and Unemployment Rate Fri Jan 10th
- A lower or higher employment figure than forecast could move the market and is a potential risk to the short position if employment figures are positive
- However, inadvertently, higher employment figures will reduce the likelihood of FED rate cuts, offsetting some of the upside potential
This was commentary I put in previously....what ended up happening? The unemployment report on Friday ended up being way above forecast 255k vs 155k forecast. Sending treasury yields higher and the market lower. This is in line with my comment about higher employment figures, although it may sound rosey, it's further reducing the likelihood of the FED reducing rates and increase the possibility of higher inflation. The market does not like that
Target:
- Previous ATH at 236, if it breaks this level than there's opp to move down thru 232, to as low as 221
- Stop: A break above $244
- Possible profit taking at 50 day moving average near $237-$238 range
- Previous declines ranged from 8-15 days to reach short term lows, estimating similar timeframe with a possible break of support line, retest, and further decline
Risks:
- The rollout of Apple Intelligence sparks strong Christmas sales and upgrade cycle for Iphone 16
- Investor optimism for Apple Intelligence drives continued buying in AAPL
- A bounce off support and continued move higher
Overall:
AAPL has rolled out Apple Intelligence in several major markets with some features still coming soon. It would be an understatement to say that the development, features, and rollout have be clumsy at best. Not only has the rollout and announcements been underwhelming, but Apple looks to be playing catchup with technology competitors have already well established in the market.
Apple continues to be a loved brand worldwide, and there's no denying the brand loyalty is still strong, however lagging technology, premium prices on their products, high PE/valuation with flat to declining revenue and profitability. Until Apple can either reclaim it's technological advantage by becoming a leader again in the market, or reposition it's product offering and pricing to drive demand, it's difficult fundamentally see why the stock is worth the PE with so many other companies in market with new innovation and growth potential comparatively.
This isn't to suggest Apple will collapse, but a correction technically and fundamentally is warranted near term with broader economic risks and technological missed expectations that could warrant lower prices.
My Position:
3 Put Options
$235 Strike, Current Price $242
Expiration Friday Jan 17th
Average Price is $1.30 a contract
Investment $400
Target $3.00-$10.00
Stop $.65
Potential Loss -$200
Potential Gain $400-$2600
The reason for the wide target range is because if APPL breaks through the 50 Day MA and the previous ATH, that is very bearish and although it may retest that level, it could create quite a fall and I would look to maximise my trade at that point.
Trade fermée: cible de profit atteinte
Hi All,
I exited this position on Friday Jan 17th. Apple definitely moved down especially with the news released regarding their move to 3rd in market share in China and also the issues with Apple Intelligence news.
My Position:
3 Put Options
$235 Strike, Exit price $229
Expiration Friday Jan 17th
Average Price purchased $1.30 a contract
Investment $400
Target $3.00-$10.00
Stop $.65
Potential Loss -$200
Potential Gain $400-$2600
Sold @ $6.00 average per option
Total Revenue $1,800
Gain: $1400
4.5:1 P/L Ratio
Clause de non-responsabilité
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