timwest

AAPL set to move sideways through 1Q2014

BATS:AAPL   APPLE INC
1603 18 7
I believe that the recent accumulation of AAPL             shares is just the beginning of a much slower, longer-term advance. I believe that a massive number of shareholders are sitting at or near breakeven at current prices. Given the turmoil they have seen in the price and the losses they have had to live through, I think they will slowly come out of the woodwork, and unload their shares.

The story about mimicking the stock market crash of 1987             continues with AAPL             shares. What is useful to note is that there were three attempts to get over the same resistance levels the year after the crash. The blue box with the blue lines projecting out to the right represent the same chart levels from the same pattern in the 1987             stock market crash.

The point here is that it takes a long time for shares to find a new home and especially so for a company with a market cap of $500 billion.

If you don't own AAPL             shares, I'd suggest selling puts going out 6-9 months at the $480 level on the next decline to $480. If you do own AAPL             shares, I'd suggest selling "at the money calls" or $500 strike calls with the same 6-9 months of time to expiration. For adept traders, I'd be shorting against $510 and covering $490, $485, $480 with a stop over $525. I would also go long at $480 for starters, then add at $485 and at $490 and exit up at $510-$515.

I think we are looking at a great "trading range" setup for AAPL             for the next 6-9 months.

Cheers.

Tim 3:50PM EST Monday, August 26, 2013
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pdiddy.pablo
3 years ago
while I get your sentiment on waiting to buy at dips to 480, I think you'd have to be crazy to short at these levels. even a short at 525 is risky. One positive surprise and 540-560 will come quick. The chart is very bullish and it coincides with bullish fundamentals (new product cycle, iradio, google in a down trend etc). My two cents...
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timwest PRO pdiddy.pablo
3 years ago
AAPL is now down to the lower end of the forecasted range through the rest of the year. This is as good a time as ever to cover shorts.
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pdiddy.pablo
3 years ago
The only negative is the over all market...
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speculator
3 years ago
i agree with paul, after a nice breakout of double bottom, looks like a pause/consolidation and likely beginning of a new bullish trend but feel like it will come very quick when it does break the 510 resistance area. will know if this is a head fake if sell off occurs after september 10 news catalyst.
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timwest PRO
3 years ago
$520 is the lowest-risk shorting level based on the chart. The stock is loaded with new momentum-buyers and pile-on traders with fresh profits and also loaded with long-term buyers with losses. Anything is possible, of course. I like the probabilities, overall. AAPL is beating to its own drum and isn't very correlated to the S&P500 this year. In fact, the correlation coefficient for the past 7 months is a lowly 0.18. (Source: www.buyupside.com )
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timwest PRO timwest
3 years ago
You can see what happens to momentum buyers and "pile-on-traders". They get stopped out "en-masse" and create large gaps in the chart when they realize they can't win in their short-run time frame.
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I'm looking to buy, need to see lower Implied Volatility on near dated options.
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timwest PRO QuantitativeExhaustion
3 years ago
After a massive spike in price movement, the options will stay rich for at least 5 days. The way to make money, in my opinion, is to sell puts going out 6-9 months at the 470-450 level. This is the same profile, of course, as doing a buy-write. When Volatility is HIGH, it's usually time to BUY. When volatility is LOW, it's usually time to GO.
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Good suggestion. Selling Puts would be a good idea. Think you can make more money with less capital with Long Call on Dec or Jan deep OTM Calls.
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Barker
3 years ago
Congrats again Tim.

I bought some shares for my kids back in July. My kids are 20 and 16. I plan on turning the shares over to them on their 21st birthday. My way of trying to get them interested in the markets.

They've done pretty well so far (430's to 500) and they don't even know it. ;)
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timwest PRO
3 years ago
AAPL is now down to the lower end of the forecasted range through the rest of the year. This is as good a time as ever to cover shorts. 471 last. 9/12/2013 at 11:19AM EST
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timwest PRO
3 years ago
This is also a decent time to buy AAPL with a target back up to 500 over the next month or two. I imagine that this holiday season will be the excuse to buy AAPL shares. Perhaps expectations are back down to the level where AAPL can now beat the consensus earnings and revenue forecasts.
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Should we count this as the first attempt?
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timwest PRO QuantitativeExhaustion
3 years ago
I sold puts on AAPL when it neared $453 - I went out 6 months and used the $450 strike to collect $39 in premium/share. That way if I get assigned I end up paying $411/share, which I think is a great price. The bad part is that I don't fully participate on the rally back to $500-$520. I may consider doing a buy-write on additional investments in the near future. I think we will get a quick idea of how the new phones are selling by the end of this month. I have an android razr and I'm strongly considering a move back to the iPhone. I admit I love my iPad2 and iPad mini and my iMac, but just sharing so you know what, if any, biases I may have.
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timwest PRO timwest
3 years ago
AAPL is back on its feet, but don't expect it to get up and start running from here. Just look for sideways action for the rest of the year. This is an EXCELLENT time to sell calls to momentum buyers. Volatility is high and call premiums are rich. This is a good time to sell those time premiums and look for sideways action in AAPL shares for the next 3-6 months at least. It will take time to get through $500 in a long term, meaningful way. This is just how I see it. All the best. Tim $493.
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ct586283
3 years ago
Tim, any new comments to this chart? I make my own decisions but was wondering if you think we are at attempt number two of getting through the "supply zone". I may take some profits now, but always like your analysis.
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timwest PRO ct586283
3 years ago
I'm re-viewing AAPL now that earnings are out. The structure of the price action I had labeled is about right and this latest rally is the 2nd attempt. The pullback from $540+ after hours to just over $502 is a sign it will take awhile for AAPL to get through these supply levels. Buy any drop down to $480, but I would view that as the last buying opportunity and a great 1-3 year entry price. I would exit in the near term (1-3 months) on any rally back to $540-$550 level. The initial premise is still the same - net sideways action as long term shareholders turn over just above $500 and new shareholders accumulate just under $500. Tim $516 last, after hours 4:41 EST on 10/28/2013
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timwest PRO
2 years ago
This forecast is still about as accurate as I could hope for - note the comments all the way to the end.
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