AAPL’s earnings always generate a huge discussion and they affect any traders. As you likely know, AAPL is one of my favorite stocks to trade and trade. I often post my analysis pre-earnings here, just for you on TraderPlanet!
In this particular earnings gap, I’ll be slightly surprised if AAPL gaps more than 10%, now that AAPL is an official ‘blue chip, dividend paying’ stock.
Here are my thoughts on AAPL over earnings. This will be purely a shorter term (weeks to months) perspective based on the technical charts of AAPL. Earnings are this upcoming Tuesday after close. My best guess?
Well, I’m personally hoping AAPL gaps up. If AAPL gaps above $101, it will be above the 100 simple moving average, while also trapping the 4 days of bearish traders that we’ve seen recently. Anyone shorting AAPl here recently will be trapped and likely forced to buy to cover. I would love an open in the $101 – $103 range. That would be glorious. Then my plan would be to buy AAPL $102 calls.
If on the other hand AAPL does gap down, I’ll be interested to see the magnitude and thus the size of the gap down.
A gap down of less than 10% will probably play out in a very odd manner. I’ll still be bullish but the $92 range is a very strong support. I mean, how many times can AAPL bounce strongly off of that support? $93.31 is the 200 simple moving average on the weekly, which is also a strong support. Will AAPL bounce again, if it gaps down that far? Maybe. That’s what I’ll be interested to play (the bounce) with either some put sales or calls.
Regarding those who might have shares of AAPL, I really liked a $105 Aug week 1 covered call, bringing in about $0.45 cents per 100 shares. The 200 SMA on the daily is $104.12.
If AAPL gaps up large into that $105 range those who bought off of $92 will likely sell that gap and it will fade and trade back down to $100, where I expect to play the bullish bounce off of $100. And of course, AAPL could gap up above $110. I give this a 1% chance of happening, but it would be such a strong and powerful earnings gap, I could see AAPL hitting $131 again, by the end of the year, if that happened.
It kind of appears AAPL could be forming a double bottom on the weekly, too. That’s why I anticipate a wait after a gap up for a possible trade down, at which point I’ll be a buyer. Either way, I love AAPL long term. I would love to hear your thoughts on either of the above stocks. Feel free leave a comment below and tell me your trading plan or email me at jerremy@reallifetrading.com if you have any questions!
Thanks so much for reading and until next time, remember, Love Life, live life and trade it!
Jerremy Alexander Newsome
C.E.O. of Real Life Trading
