Today’s Stock Trade: AAPL
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The Problem
I created my first newsletter replete with 3 stock trades that I’ve done recently and my trading strategy for today. Unfortunately there was some sort of system issue and it dropped my content (even though it was saved). I spent considerable time on it, but I’m too tired today to rework it. I couldn’t do it justice.
The Trade
Instead of my 3 trades, I will leave you with one trade for today. If you can get into Apple early in the day before 2pm (earnings call), try to buy a June $95 Apple Call [QAAFS] with a limit order up to $4.20. I opened a position myself April 24 @ $4.00.
There was a great buying opportunity yesterday when their was some TV coverage of the options back-dating scandal. The option dropped to $3.30. Unfortunately I missed that opportunity. My take is that the options-backdating is a compensation issue, not an earnings issue. As such, the company is large enough and profitable enough that it would not make a material difference and I don’t believe there is a fundamental ethics problem at the company ala Tyco or Enron. The products are great. The customers are great.
I expect the iPhone coming up in June to start creating a buzz. I also anticipate the earnings call to also give us a hint of how well the Apple TV and its movie downloads on iTunes are doing. I’m personally considering buying an Apple TV and I’d be lying if I said the iPhone didn’t make me salivate just a little. I’m just waiting to make some money off of my Apple option. Its only fitting I reinvest back into the company. In my household I anticipate 2 to 3 Apple purchases this year – an Apple TV, a MacBook, and perhaps an iPhone. [Note to readers - I don't make a dime on any of the links to the Apple website. Steve if you're reading...hint-hint I'll settle for a free iPhone as commission]
The stock appears to be in the early phase of forming a new base. It is going into positive news with the Apple TV results out as well as picking up a whole percentage point of market share in Mac sales. iPods are still selling like hotcakes. Positive momentum going forward should propel this stock. This is a buying opportunity.
Let’s Make Some Money!
Make sure to attach a trailing stop of .50 to protect against a negative earnings surprise or flat investor enthusiasm. It will also ensure if the stock starts running up that you’ll cash in a profit should it start to fall during the day after a rise.
Make sure to countdown to the earnings call. It is at 2pm PDT. You can listen to the Apple earnings call here online.
More to Come
I wish I could leave you with more on my other stocks, but they are more long-term positions and I will provide another update with more info on why I chose them so you can make your own informed decision once I am not so tired.
And lastly… I’ve got to get in the top 1% on the CNBC Million Dollar Challenge. I now realize it urks me to not be on top. I was in the top 3%. The fact that there are over a million contestants makes me feel better, but not much.
I’m declaring a goal of being in the top 2% by May 12. My second goal is to be in the top 1% by May 25th. Stay tuned…
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