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Registered User
Joined: 11/1/2005
Posts: 5
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Now that AAPL has to restate earnings for past quarters, this should be a obvious short opportunity. Probably will go down as quick as it shot over the past two weeks and easily test the July lows. Any time a company has executives resigning and option back dating issues this usually means more trouble lies around the corner.Any opinions and/or observations?
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Registered User
Joined: 3/25/2005
Posts: 67
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The stock looks strong right now from a technical standpoint, and since i'm a technical trader, i wouldn't short it now. But if the options backdating issue does to aapl what it has done to many of the semiconductor stocks, the technicals may start to change.
JG
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Registered User
Joined: 12/19/2004
Posts: 457
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On a daily chart, I can understand why someone would think AAPL looked strong. On a weekly, it simply looks like one of the typical sharp counter trend rallies in a bear market, that is reaching a point where it should stop going up, and continue down. I wouldn't want to be buying here, that is for sure.
As for this options backdating--I'm not sure how significant it is, although I'm inclined to believe it isn't as important as it may seem.
If AAPL has to restate earnings because sales were mis-stated, that would be much more significant. What is going to bring AAPL down is changes in growth expectations.
If sales and earnings growth slows, as I expect it to, that is going to hurt the stock.
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Registered User
Joined: 3/24/2006
Posts: 72
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Doesn't Apple have a huge conference on Monday? I'd wait up a bit to see news from that prior to a short decision.
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Registered User
Joined: 5/28/2006
Posts: 2
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why not put a sell short stop at say 64 or so, or better yet an alert anywhere you see a technical weakness, so that if you are right you can still catch the major move if you do expect a major move instead of being caught in a whipsaw at say a buck or two down just to see it move back up another 5 or 6 bucks. Just my 2 cents but its something thats worked with a lot of convication for me. I let the stock show some strength or weakness( whatever is my opinion) before I jump in with my money
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Registered User
Joined: 7/26/2005
Posts: 23
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QUOTE (rmr1976) On a daily chart, I can understand why someone would think AAPL looked strong. On a weekly, it simply looks like one of the typical sharp counter trend rallies in a bear market, that is reaching a point where it should stop going up, and continue down. I wouldn't want to be buying here, that is for sure.
As for this options backdating--I'm not sure how significant it is, although I'm inclined to believe it isn't as important as it may seem.
If AAPL has to restate earnings because sales were mis-stated, that would be much more significant. What is going to bring AAPL down is changes in growth expectations.
If sales and earnings growth slows, as I expect it to, that is going to hurt the stock.
1. AAPL was waaay oversold & waiting for a catalyst
2. An analyst who is usually right on AAPL (Gene Munster/Piper-Jaffray) was quoted the following day with a restatement estimate of $25M. This compared with $4B++ in net profits same timeframe.
3. Why would you expect Apple's sales & earnings growth to slow? They're making solid gains in market share (computers) in the last 2 quarters - particularly with laptops. The high-end desktops are due to be released shortly, completing the company's product line transition to Intel chips (enabling running Windows natively side-by-side with the Mac OS. And in some cases, using a new application due in Sept. to run Windows programs natively on the Mac - via a compatibility layer - without needing Windows at all.) In fact, I'm hoping we can finally get TeleChart running on a Mac without having to resort to Virtual PC(!!!) As for iPods, they're showing no signs of slowing and have excellent growth prospects from here. Apple has just signed deals with automakers that will see some 70% of cars sold in the US fitted with iPod connectors from the factory.
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Registered User
Joined: 12/19/2004
Posts: 457
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Jim,
The macro picture is simple:
1. Consumer spending is going to slow
2. Corporate spending isn't going to expand like everyone expects. None of this is good for AAPL's sales.
Any growth you talk about is likely priced into the stock. Plus, the chart looks terrible on the weekly. I'd favor the short side here.
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Registered User
Joined: 7/26/2005
Posts: 23
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QUOTE (rmr1976) Jim,
The macro picture is simple:
1. Consumer spending is going to slow
2. Corporate spending isn't going to expand like everyone expects. None of this is good for AAPL's sales.
Any growth you talk about is likely priced into the stock. Plus, the chart looks terrible on the weekly. I'd favor the short side here.
Well, here it is 4 months later, AAPL has vaulted into the 90's (although consolidated over the last week to close today at 89.83) - this as compared to the 60's as of our last discussion. Despite the macro picture, AAPL keeps having blowout quarters (July, Oct, probably Jan as well). They're rapidly gaining market share in computers, outpacing PC makers (AAPL now has a market cap substantially bigger than Dell). They also have a great product pipleine that the entire planet is apparently salivating over and analysts are forecasting huge sales growth. As for corporate spending reductions, that could ironically work in Apple's favor. Companies are so bloody sick and tired of the Windows malware issues (Vista is already being hacked) that Mac sales to businesses are upswinging becuase of more system stability. In addition, their 1U servers and 3U RAIDs are getting rave reviews. And the server/client licensing is much lower cost. And finally, in terms of iPod/iTunes, they seem to be accelerating (especially internationally). The one serious shot anyone has had at making inroads against their music ecosystem was the recent launch of MS Zune. Two weeks (in the Christmas shopping season) after launch, Zune seems to be falling off a cliff. Nobody seems to like it or have anything good to say about it. The post-Thanksgiving analysis of Zune at a distant 2nd behind iPod turns out to have been done with incomplete numbers. This week it's fallen to 5th behind iPod. Even Ballmer said today that MS hopes to sell 1 million Zunes by June. Contrast that with 39 million iPods this year.
The point is that company-specific fundamentals (including their innovation and ability to outpace their industry, sector, etc even if the economy slows) are as important as any other technical factor. The charts are merely a highly refined measurement of crowd psychology in the marketplace. The quarterly reports are the measurement of the company.
Would I buy long here? Actually I bought $90 puts a week ago based on the chart data, seeing that a pullback looked eminent. When the charts improve, then I'll go long.
FWIW, I'm curious as to whether you actually were short at the time of your last post, and what was your calculation for where to cover?
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