Apple will step up to the plate on Tues July 23 and tell us how well they did during their second quarter. Expectations are quite low again after they whiffed in April and lowered guidance substantially for this quarter.
DEARTH OF NEW PRODUCTS
It has been a long while since the company came out with anything ‘fruitful’ with respect to new products. The world awaits news of the next new game-changing device from the mighty Apple, but those yearning for the ‘old days’ may again be disappointed.
GROWTH IS STAGNANT
The company has a way of setting the expectation bar rather low, managing the hopes/dreams of investors/traders/analysts with precision. However, that process only holds water when there is a pipeline in the works, and to date Apple seems content to just refresh existing products. Growth is stagnant and has been for several quarters.
In 2012 the stock got well ahead of the growth curve and when reality checked in the stock came crashing down. For the year Apple is down a very disappointing 19%, while peers are UP double digits or more. To be fair, on a long term horizon (say, five years) Apple has far outpaced the competition in nearly every sector – still.
THE TECHNICALS
The daily chart is a mess. However, there has been some improvement this month in the indicators, volatility is low (historically very high pre-earnings) and the stock is in far better shape than it had been the last two quarters (see Figure 1 above).
PLAY IT SAFE WITH SPREADS
It’s going to be a ‘game time’ decision for me, but I suspect playing it safe with some spreads is the operative thing to do. Calendars are generally the choice. Tuesday will likely be the decision day.
= = =
Bob Lang has a newly re-launched website at www.explosiveoptions.net, where he manages subscribers, writes a newsletter, hosts webinars and has just opened a brand new chat room. Check it out!
