It was the third red session in a row for the Nasdaq
Thursday Morning Market Minute – 4/30/15
How to Trade AAPL for a Bounce
The last couple days in AAPL have been very eventful. To start off the weak, AAPL reported very strong earnings that beat all of the streets estimates. The main headline was the 61 million iPhone figure and the 27% EPS growth Y/Y. In addition to that, the share repurchase program was increased from $130 billion to $200 billion. This is all very impressive and shows why AAPL is a phenomenal company. The question is, why has AAPL sold off $7 peak to trough in the two days following? I think the answer is, peoples’ expectations are very high for AAPL and because AAPL did not give any surprises there were no new buyers for the stock. That is a big problem; everyone that likes AAPL probably already owns it. And anyone that does not own AAPL is probably not convinced by this earning report to change their mind. This leads to a stalemate between the bulls and the bears. How should we play this?
I think the way to play this is to respect the new trading range that AAPL is in. We do not yet know the bottom of the range as AAPL has not yet had a meaningful bounce, however, I think that if we get down to 124-125 we should see a sizable bounce. That level has held for over a month and has attracted any buyers (and would also be a $10 pullback).
Earnings Breakdown for Thursday 4-30-15 – $FEYE $LNKD $EXPE $V
Earnings after the bell on Thursday include $V $EXPE, and $LNKD.
$V is expected to move almost 4%, $LNKD $FEYE almost 10% and $EXPE almost 7%. More on these earners can also be found here.