So Simple: Apple Earnings. I wish trading it were that easy.
Where is it headed? Back in May 2013 when AAPL was trading at a $55 or almost 50% less than it is trading now, analysts were busy saying the stock was done. Growth was done. The stock was going to be dull and boring in the years ahead. Analysts were so eager to downgrade the stock. This is what I was saying at the time.
And while I was early in calling for record prices, I do think they are coming. Will this earnings report be the one that sends it over $100? The only thing that scares me about $AAPL right now is that the same analysts who were downgrading the stock, and lowering price targets at the lows in the Spring of 2013, are the ones upgrading the stock and moving price targets higher. This morning one analyst raised his price target to $135 a share. But that might not be enough to slow down this stock. Once it breaks $100 I think there is no turning back for quite a while.
Our chat room is an awesome place to share trade ideas and thoughts on stocks. This morning a great trade idea was presented. The $100 January 2015 calls are going for $3.85. If $AAPL can muscle its way over $100 in the coming months, this trade will work out great. It may be prudent to wait until after the earnings report to open that trade. The risk is $AAPL shoots 5% higher tomorrow and that option rallies 40%+.
I like $AAPL for a sharp rally after the bell tomorrow. The Weekly $96 calls at $1.35 should work nicely. I'll let you know tomorrow if I get them.