by Gavin M.
Everyone including their grandparents will be keenly anticipating the Apple earnings on Tuesday night. Everybody in the world is invested in this stock. This is a hedge fund darling and this is also a CNBC love interest (just take a quick look at CNBC's site and you'll see countless articles on AAPL). There have been reports that Apple watch sales are disappointing and that does not come as a surprise. In a world where we're all loaded up on gadgets, do we really want to wear a $600 watch that can only power through 6 hours of our day? What is wrong with wearing a nice $50 Fossil watch that looks just as nice and stylish?
The chart below shows that AAPL has not gone anywhere since February this year. They really would have to show huge blowout numbers to break above the key 134 barrier. I am not surprised that much of the bounce from 120 is a result of shorts covering ahead of earnings. Besides, prudence dictates that you cover your positions ahead of a huge binary event.
I certainly am not an analyst so I will not speculate what the expectations are for Apple's earnings. I will leave that up to the drones of MBAs working for numerous hedge funds doing channel checks and crunching numbers that will eventually lead to useless information. However, there is one thing certainly I would not do - go short Apple into earnings. Stocks like AAPL, TSLA, AMZN and NFLX - they have cult-like following and you really should not try to go against the big boys as they have more firepower than you.
Maybe AAPL will finally break above that pivotal 134 level and bring the Nasdaq and S&P and DOW to MOAR HIGHS. The market desperately needs more ATHs to keep the dream alive. So ensure that you have the right plays into earnings. If you want to know what we are going to do for our earnings play, just go to our Trade Strategies Page.
But as a reminder of what happened last time Apple reported, here it is in all of its sell off glory:
Traders from Equity Sense will be writing on this blog on positions and other market-related things.