Lower forecasts, weak earnings, missed earnings it all works for me.
Lately the market has been in a slump and I plan on it to keep falling with continuing conservative estimates for Q2 earnings, weak earnings, missed earnings, and price wars for the chip technology sector. Bad results are still profitable for me and easier to spot out. My 90 APR 2007 Put options on AAPL are up $1.20 or around 15% percent. I bought them at $90.53 and the stock price of AAPL is currently $86.70. They were up as much as 30% today, but the current downtrend of the market, its negative tone on earnings, and increasing oil prices kept me in the option since it is going in my favor. I definitely want to sell out soon, but I can wait because AAPL is still due for a bigger drop in stock price, I think below $80. I also own 75 Feb 07 Put options and they are up 25% percent, but not worth as much. My 70/30% earnings report options play didn’t work as I assumed it would. I think the smarter way of going about earnings is seeing what happens the day after and buy calls/options upon the results. With stocks either your right or wrong about the direction. Once you know the direction and the general market tone and where it is going the smart thing to do is trade with the current direction.
Currently I really like NUE for steel and OIH and COP for oil stocks to buy to go up now. I think these are going to be the best plays for profiting in 2007 for the first 8 months.
I think AAPL could have a growth spurt later in the year once the iPhone is being sold and see how consumers respond to it. I already know I’m pretty likely to buy one because I really do not like my RAZOR. I like Cingular, just not the phone.