I was on CNBC this morning talking about AAPL and RIMM with Carl Quintanilla. Here is my analysis. (December 17, 2012)
AAPL BBRY
I’m Dan Fitzpatrick at Stock Market Mentor and OptionMarketMentor.com on December 17th; by the way if you’re not a member of Option Market Mentor, or you haven’t tried it out, please do so, okay? We’ve got some good trades going on over there, and my videos are also focusing on helping people learn how to trade options; that’s a process, it’s not an event. I want you to go check that out. Also, while I’m talking about that, I will be teaching and online webinar, live streaming, me in the studio, on options, in January, so get over there, at least get on the mailing list, and you get more info on that. Okay, earlier today, at 11:00 Eastern, to be exact, I was talking about Apple ( $AAPL Apple Inc ) and Research In Motion ( $RIMM Research In Motion Limited ) on CNBC with Carl Quintanilla; boy that guy is a nice guy, love him, huge man crush. Anyway, what we were talking about was the potential head and shoulder pattern on Apple ( $AAPL Apple Inc ), and then also Research In Motion ( $RIMM Research In Motion Limited ), so I thought I’d just go through that with you. Okay, on Apple ( $AAPL Apple Inc ), look at today’s low, $501.00, very, very close to $500.00; my neckline here, I’m not talking about my 17 inch neck, I’m talking about connecting this last low, with this low here, is now being confirmed by this low; this is the left shoulder, this is the head, this is the right shoulder, these three form a head and shoulder pattern only if the neckline here’s pierced, and it’s got to be pierced on strong volume; so far that hasn’t happened so I view Apple ( $AAPL Apple Inc ) now at $519.00, I actually look at that is a buy, not a sell. Now if Apple ( $AAPL Apple Inc ) ultimately falls below $500.00 hundred, again, on heavy volume, then it rallies back up to, you know, around this point or so, if it starts teetering at all, that’s a massive shorting opportunity, love to see that opportunity; short it there, ride this thing all the way down to victory, just a measured move, it’s not my price target, it’s just a function of math. You take this, which is a $190.00, the difference between the top and the neckline, at that point, extend it back down from where the neckline is broken, we’ll say $500.00, and that gives you $310.00 as a price target. Now I’m not saying that Apple’s ( $AAPL Apple Inc ) going to go that low, if it falls below $500.00, that’s really not the point, the point isn’t about me being right, the point here, and what I’m trying to do, is to help you make money, and so the idea is, if Apple ( $AAPL Apple Inc ) falls below $500.00, just stay away, let the stock do what it’s going to do, we could get more selling into the end of the year, or not, maybe this is the bottom, maybe, this is the bounce, like I said, I view this bounce, right now, as a buying opportunity which would mean that I would want to keep my stop just a little bit below $500.00, and if you think $20.00 is a big number, no, move the decimal point over one and the stock is not at $519.00 it’s at $51.90, and we’re talking about keeping the stop below $50.00, we’ll say $49.00 or so; so it’s really not as tight a stop as you might think. For the time being, again, Apple ( $AAPL Apple Inc ) remains a buy, with the stop right here, if it falls below $500.00 it’s a sell. Okay, now Research In Motion ( $RIMM Research In Motion Limited ), this is really interesting, I look at this like three pops in a drop, I think that’s something that I just made up, maybe not though. Look at the volume here on the initial move higher, Boom! That’s your first pop, then, well, I guess this wasn’t really a pop here, we got a nice move but the volume was not so good, now we’ve got another high volume move right here, then finally, the last high volume move was just last week up to here; but if you look at the line connecting volume peaks, it’s declining, so what that’s telling me is there’s waning buying interest, buying interest is diminishing on these big moves. Now what does that mean? Well, when you see huge volume you need to think institutions, you know you and I in our little Ameritrade accounts don’t really move stocks much, not like Research In Motion ( $RIMM Research In Motion Limited ), not a stock that trades almost 44 million today, that’s institutions. My contention is they’ve already made their move. Now the company announces earnings after the market on Thursday, that’s three more trading days, and my bet is, that unless Research In Motion ( $RIMM Research In Motion Limited ) falls before then, my bet is, that’s going to be a really, really good opportunity to sell the news, because this stock has run up incredibly, four-month base here, but look at how far it’s run. So with all that pent up buying already taking place, and by the way after you’ve bought a stock what are you? You’re a cheerleader, and you’re also a potential seller, those are the only two things you’re going to do, you’re going to be leading cheers, and you’re going to ultimately want to sell this stock. So, if they announce massively strong earnings, what’s going to happen? Okay, the stock will pop up, and then it’s going to drop, because that’s what these stocks do, or the stocks just going to gap down and who knows what it’s going to do, I don’t know. All I know is this; I want to be out of this stock from a long side, I want to be out of this stock before the end of the day on Thursday. Frankly, I’m already short this stock, I’m using puts on it, and my position, just so you know, because I mention this to Option Market Mentor members earlier today, my position is that if I lose 100 percent of the money that I’m putting in on puts, I’m okay with that, I mean it’s that small of a position, but it’s also the type of position that if Research In Motion ( $RIMM Research In Motion Limited ) does what I think it’s going to do, then that small put position is going to turn into a really big put position and I’m going to make a nice profit. So my suggestion is, again if you’re going to short the stock just know that you could get a big gap up, get squeezed out, and then the stock will fall. So the stock seems like it’s always going to go against you if you try to game earnings, but just keep in mind this party had a heck of a move, so how much more can it move, how much more can it advance before this stock ultimately just pulls back? Okay, that’s it here; now members get over to the Strategy Session. Free Chart