Short apple before earnings
As you might have seen i have not traded for almost 4/5 weeks and there is a good reason behind it. When i saw the markets behaving erratically, every negative news being considered positive ,iran issues,risk impact completely neglected ,focus on trade deal phase 1 (which aint even full of promises), tweets from trump and so on, i decided to sit back and just observe until i see a clear direction.
The wait has been long but fruitful considering nasdaq went from 8.2k to 9.1k within this span and this i think is extremely overdone. Apple right now is at a stupendous price of 315+ $ and in my view quite overvalued. Earnings are set to kick in , and in my research the only thing showing up is promises of iphone 11 being a huge hit and so forth but i highly doubt it considering the market cap of apple smartphones are only falling. it might be the best selling apple phone, but not the best selling smartphone and even right now iphone sales account for half of the revenues from apple. not to mention the extreme sharebuybacks might have to stop at one point and there is also a big correction necessary to drive such a stock upwards.
factors which might drive the price higher :
1. There is a good chance apple might increase its dividends value this year thereby driving more investors in it and thereby pushing the price to around 340-350.
2. Chances of a rate cut. the recent data published shows that the inflation is lower and even though the chances of further rate cuts are low, but with low continuous low inflation and trump forcing FEDs to consider further rate cuts, i cant neglect this .
but overall there is much potential for further downside than upside and recognising it is what makes a smart trader.
Analysis:
i am short on apple at 317 USD.
Tp1 300
Tp2 280 (fibo retracement around 285 might be a good resistance so adjust it between 280-285)
Tp3 260
I will get back into apple depending on the earnings , and if they are not so bad, i will buy the shares again around 250. right now , it is just too expensive.
The wait has been long but fruitful considering nasdaq went from 8.2k to 9.1k within this span and this i think is extremely overdone. Apple right now is at a stupendous price of 315+ $ and in my view quite overvalued. Earnings are set to kick in , and in my research the only thing showing up is promises of iphone 11 being a huge hit and so forth but i highly doubt it considering the market cap of apple smartphones are only falling. it might be the best selling apple phone, but not the best selling smartphone and even right now iphone sales account for half of the revenues from apple. not to mention the extreme sharebuybacks might have to stop at one point and there is also a big correction necessary to drive such a stock upwards.
factors which might drive the price higher :
1. There is a good chance apple might increase its dividends value this year thereby driving more investors in it and thereby pushing the price to around 340-350.
2. Chances of a rate cut. the recent data published shows that the inflation is lower and even though the chances of further rate cuts are low, but with low continuous low inflation and trump forcing FEDs to consider further rate cuts, i cant neglect this .
but overall there is much potential for further downside than upside and recognising it is what makes a smart trader.
Analysis:
i am short on apple at 317 USD.
Tp1 300
Tp2 280 (fibo retracement around 285 might be a good resistance so adjust it between 280-285)
Tp3 260
I will get back into apple depending on the earnings , and if they are not so bad, i will buy the shares again around 250. right now , it is just too expensive.
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