AAPL, RIMM, and MA down, entire market down, dumb Feds and rate hikes.
Apple Inc. (AAPL) headed lower to $83.20 down 3% (-$2.91). Definitely a hit today with the entire market going down after Fed chairmain Bernanke said the U.S. growth has been too quick and a rate hike will happen. I was very wrong about AAPL and did not take in the fact that a big Fed decision was going to be made today. If I would of not have traded AAPL it would of prevented a big loss moved by the market after the rate hike decision. Investors not happy about this sold off stocks without any buyers their to get in on. Mastercard reported today (MA) and dropped 10% to $103 like its previous earnings even beating analyst expectations with investors worried about profit growth. Looking at the technical chart it looks like buyers were confidently getting back in at a lower price level the last hour to buy back the stock at the $100-103 range. I think its a buying opportunity now to with a pull back from $118, but with the current market conditions I’d wait to make sure and see a climbing pattern to show the stock is still bullish.
See MA’s 55 minute and daily chart below: (Click to enlarge)
As for AAPL, if the entire market doesn’t rally next week I will be 100% wrong about it. It’s previous year during the time it made a strong downtrend and then was broken in Feb just like this year. The down trend has been broken and AAPL is due for at least a mini-rally. It seems CEO Steve Jobs head is getting a little to ballooned up with his iPhone product and iTunes music store dominating the digital music market. I read a bloggers comment about how CEO Steve Jobs would never release a product until 1 month before shipping to keep it secret and he broke that rule with the iPhone giving it 6 months until its release. Now other companies like Samsung are duplicating the phone look and must likely ship the same time giving more consumers a “choice”. So I think the blogger made a good point there where if its released a month before its shipped it doesn’t give huge companies time to make a simular product to compete with Apple Inc’s product. I guess we’ll see how things work out. I’ve been hearing a lot of positive talk about this iTV even though everyone that talks about it doesn’t even really know what it is or what it does. Interesting huh? From my knowledge it is basically a digital library to simplize it. You can put all your iTunes downloads on it connect to your Tv set to watch it. My questions is aren’t computer monitor screens just as good or even better than Tv screens these days? I think its taking a step back. I think Apple Inc. should of offered a big flat screen with the iTv built in or of made that a choice. It just seems like a lot of unnecessary electronics that will clutter your room to me. I like Apple but I think we should be kicking the Tv set out by now. I watch my cable on my lapton, project, or on my flat screen computer monitor. I think the Tv is bulky and out of the question of having.
Below is AAPL’s 3% sell off and most likely start to a bear downtrend:
(Click to enlarge)
Another stock trading more volatile then AAPL great for the experienced option trader is Research In Motion (RIMM) which also fell 3% today in the tech sector. Most of it’s buying opportunities have been in the $122-124 price range before it shoots back up to the $130’s.
See below in RIMM’s daily chart: (Click to enlarge)
This entry was posted on February 10, 2007 by Paul. It was filed under 2007 option picks, 2007 stock picks, apple computer blog, technical chart, trading stock options .
I expect based on my model for the current downtrend to last through Valentines Day…. maybe a Valentines Day Massacre 🙂
I am net short of course with a beta of -0.5 portfolio wide. Biggest short QQQQ/NQ position I have ever had. More than $200k of underlying value.
February 10, 2007 at 8:26 pm
Hey Moom. Big trade you are doing. I’m with you on the market going down. The second peak happened on friday and it shows the market it moving down with a big confirm. I guess it was pretty predictable. With Apple Inc.’s new software coming out late Feb I think AAPL could still have some upward movement. I could be wrong, but last year it moved up into the new software launch in late Feb.
February 10, 2007 at 9:04 pm
Well it’s only half my net worth and it’s the index of 100 stocks so not really a very big risk 🙂
February 11, 2007 at 12:55 am
Well if you want to get to be a millionaire at some point you’ll be taking big trades and in index futures they are going to have to be the size of your net worth (or half in this case) if you are going to get anywhere at any reasonable speed. This is the biggest position I have held overnight but at times I’ve been up there in the day… will only get bigger hopefully 🙂 I can’t imagine the market will melt up on Sunday night or Monday morning by more than a few points in the worst case scenario. I feel safer taking big shorts than big long positions.
February 11, 2007 at 4:43 am
Very true Moom. After checking out my account I am finding I’m already down for the years because of some old options that expired and didn’t work out as I planned and a recent oil trade that didn’t work. =( So I’m definitely not adding any new funds.
February 11, 2007 at 12:10 pm