Some candid remarks about your favorite stock. Let’s look at the long and short of Apple (AAPL) (October 20, 2015)
AAPL
Lets look at Apple ( NASDAQ:AAPL ) here. The company reports earnings, I think it’s next week on the 27th, a week from today, they report earnings. It wouldn’t surprise me to see the stock go up just because it’s already gone down quite a bit. But it was not lost on me. A couple things, first of all Kevin O’Leary, Mr. Wonderful, who I think is great, I love that guy, he’s been doggin’ on Apple Music, as I have in the past, only he has a bigger megaphone, because it basically sucks. I’m sure a lot of you people subscribe to Apple Music for $10.00 a month, or something like that. Guys like me, I’ve invested thousands of dollars over the years. I’ve given that money to Tim Cook’s predecessor. Now Tim even gets to use some to save the whales in some of the non-profitable expenditures that Apple ( NASDAQ:AAPL ) does so he can feel good about himself.
So I’ve done all that, I’ve invested in My Music and now I have a platform in Apple Music that I can’t integrate that stuff into. It’s a bear to use; I’m constantly being asked if I want to subscribe to Apple Music and give Tim another $10.00 a month. Memo to Tim: I don’t! By the way, I haven’t bought any music in quite a while either, because it’s just like a different user experience. Why am I telling you this? I’m telling you this because I’m not the only guy out there. I’m not the only old guy out there who thinks Jay Z has no talent. I’m not the only guy out there who doesn’t like Hip hop, or Rap, or Miley Cyrus with the sticking out tongue. There’s a lot of people that just want to listen to what they want to listen to.
I think this new thing by Apple ( NASDAQ:AAPL ) is not working. I also think a car is kind of jumping a shark a little bit. So that’s just me. Now, we’ll get to the chart, and it kind of bears out what I’m saying. The stock was in a volatility squeeze here. The path of least resistance, if you look at prior trading action, should have been higher. Even here the stock drifted sideways. It drifted sideways here forever like the market. For cryin’ out loud it’s Apple ( NASDAQ:AAPL ), you expect to see this thing to go to 200.00. Carl the “Tweet” Icahn, I don’t know if he still does, he might be secretly unloading his shares, but he has like a $210.00 or a $250.00 price target on it. Now, when you own billions of dollars worth of stock you’re going to put a high price tag on it. The point is, this is a stock that should have gone up, but it didn’t. Not looking quite like this, but it’s looking a little “toppy”. You look at the daily chart and you see one, two, three strikes you’re out at $135.00. Big downdraft here.
Where are we now?
Look, if I had to choose long or short (this will confuse you) I would go long. I’m looking at Apple ( NASDAQ:AAPL ) and I’m seeing this, on a fairly weak day in the Dow and the S&P, tech, other tech was down, Apple’s ( NASDAQ:AAPL ) up almost 2 percent. They report earnings in a week. By the way, I don’t even need to look at Apple ( NASDAQ:AAPL ), I’m just looking at this picture and knowing when the company that’s creating this chart is reporting earnings, and it’s in a week. I want to buy this stock. But I’ll tell you this, let’s say it pops, if the stock pops up to $133.00, $134.00, $135.00 I want to short the snot out of this stock. It is not lost on me. Tim Cook did an interview with the LA Times talking about how sales for Apple Watch have accelerated, all these wonderful things are happening. But will he give any specifics, any details? No. So they’re not particularly transparent, but he sounds like everything’s great. Fine. I don’t believe it.
What I say is this: if a stock gaps up, if it starts trading up to $135.00 I take back what I said, I wouldn’t short the snot out of the stock (sorry for being so guttural). I would at least be taking profits or I would not be buying this stock. BUT, if the stock pops up to $135.00, if it’s up here, if it comes up to this level, like lets say they report a blowout quarter and the stock gaps. If the stock starts trading down (this is all about risk management) if the stock starts trading down then you short the stock, but only if you have a buy stop that’s VERY tight. Because the company has a boatload of cash, meaning the stock is actually pretty cheap, and the stock trades at a discount to a lot of things. So if this stock starts moving to a new high, DO NOT be shorting this stock. You don’t necessarily have to buy it, but don’t be short the stock just stand back and let it go. My bet though is, if it does come up this high and starts rolling over this is going to be a pretty good short, because I’m looking at this chart and I don’t see too much to cheer about it, other than maybe a short-term pre-earnings run.
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