Big Opportunity In Apple Earnings Play

Apple (AAPL) used to be the apple of everyone’s eye.  You could not go wrong.  Just close your eyes, hit buy on your brokerage platform and collect the cash.  That’s not necessarily the case now.  The iWatch is being characterized by some as a total flop, waning iPhone sales have been a drag, new competition, you name it.  How quickly global sentiment has changed.  If you were listening to Bloomberg TV or CNBC you would think that they were about to shutter the doors in Cupertino. 

You can make an argument that AAPL has found technical support just above the 50-day moving average and you can also make the argument that AAPL generally does quite well on the day of earnings finishing the day in the positive five out of the last eight cycles.  It is not a stretch to say for the proper reward to risk, an upside play is a reasonable (albeit contrarian) position.

AAPL reports 4/26 after the close and our signal was this:

4-25-16: Based on our methodology a signal has been generated:

Sell (opening) the AAPL

​ April​

 29th WE 113 call
Buy (opening) the AAPL May 113 call

For a debit of $0.40 or less.  

This signal is not GTC, is A DAY ORDER ONLY and is valid with AAPL trading $104.50 - $106.00.

 

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