Record Earnings for Apple – Put Options are Favored

Record Earnings for Apple – Put Options are Favored
January 29, 2015

Apple (AAPLE) just announced record earnings and investors around the world are cheering the results. However, what does this mean for the actual stock price?

Well, currently the stock trades at around 109$ and both fundamental and technical pictures doesn’t look all that good.
 

:

 
From a fundamental point of view, FOMC (Federal Open Market Committee) is supposed to release its statement on Wednesday late GMT. Market expectations are not supporting a rate hike this time, but at the very next meeting six weeks from now. Surprises should not be ruled out though as we have clear examples recently from central banks all over the world that made unprecedented moves regarding monetary policy.

In the eventuality that the Fed is issuing a hawkish statement, then stocks should suffer as we all know stocks are the ones affected when a tightening cycle starts.

A hawkish statement doesn’t necessary means that the Fed will hike the rates, but merely the simple removal of the words “patient” or “considerable time” from the actual statement should make the US dollar move higher and equities to take a hit.

From a technical point of view, looking at the daily chart, the stock seems to be in a triangular formation that seems not to be completed.

Taking into account the fact that such a triangle should break lower on the short to medium term, I am favoring put options for the Apple stock but from higher values, say around 114-115 level and as an expiration date I would go for end of month.

In other words, the providing price is moving into the above indicated area on, let’s say, approximately  mid-Feb, and the expiration date for the put option should be end of February.

It remains to be seen if market will confirm this scenario as the key stays in Fed’s hands, as usual.

Don’t forget that you can trade Apple stocks with most of our tested and approved Binary Options brokers.

Avatar

Andrew Wright

Prior to founding tradersasset.com in 2014, Andrew worked as a proprietary trader, then as a market maker. As a market maker, he traded options in over 100 stocks, he then began trading currency pairs in 2013. Andrew still actively trades both, and prides himself on educating and informing traders on the benefits of both Binary Options and Forex.


Related Articles

Wal-Mart Takes Competition Head-on by Reducing Queue Time

  During the third-week of February, the world’s largest retailer Wal-Mart Stores (NYSE: WMT) reported a higher than anticipated fiscal

Trading Strategy as Nike Reports Strong Results

  Nike (NKE) surprised markets in March with way much better than expected earnings. Investors cheered the results as stock

Trading Cardinal Health on a Bullish Trend

  Cardinal Health Inc (NYSE:CAH) is enjoying a successful run as the company’s shares almost tripled in the last two