Thinking that Apple (AAPL) might fall a bit farther from the tree? Here’s your trade. (December 04, 2018)
AAPL
Just a quick note on Apple ( NASDAQ: AAPL ) here to the short side. I would like to short Apple ( NASDAQ: AAPL ), I don’t have a position in it now but I would like to short Apple ( NASDAQ: AAPL ) because the stock just looks like it can go a lot lower. This frankly, this little bearish wedge, which I am pointing to now, this kind of looks like the halfway point. The stock is down here, it forms a little kind of ascending pennant pattern and now it is breaking out to the downside. I can see this stock going much lower.
There’s nothing wrong with the company it’s just that companies don’t grow forever and Apple ( NASDAQ: AAPL ) is pretty stinking big. So just like most companies do at some point the growth slows down and they just become more “Steady Eddie” companies that are just kind of cash machines but they are not generally making more money. Their revenues are not growing at an accelerating rate and I think that the market is looking at Apple ( NASDAQ: AAPL ) as being in that transition. Apparently, they are giving incentives to upgrade to their next iPhone.
To me, if I have to spend and upgrade to something and I don’t even know if it is better than what I have there is no incentive that’s going to make me do that. I think that is one of the problems that a lot of people are seeing. Anyway, I think Apple ( NASDAQ: AAPL ) goes lower but I just don’t want to short it right here because the stock was down 4.4 percent. And also, it is still Apple ( NASDAQ: AAPL ), it has a big fan base.
So what do we do? What we do is, we sit and wait. We wait for this thing to run its course. Right now if you do short, and look, I don’t know which way this thing is going to go, I’m just trying to manage risk here. But if you were to short the stock the only place you could really have a buy stop is clear up above this last high from Monday and that’s, we’ll say, about $10.00 above where it is right now. And that doesn’t really work for me, I think that is too loose, particularly in this kind of market.
What I would want to do is this; I would hope that we will get some kind of reflex buying. We will get some kind of buy the dip. The world didn’t come to an end on Wednesday so it’s time to get back to in the market. We will get some kind of move back to say, 180.00 or so. If this stock can move up $2.00 or $3.00 or so and then stalls out that is when I want to short the stock. I just want to short it a little bit higher so that then if the stock does start to move against me, in other words, if it starts to move higher, I am closer to my buy stop.
So this is a way that you can get an idea. You make your decision, Yes, I want to short Apple ( NASDAQ: AAPL ) but I am not going to take action on it right now because it has already fallen too far. It has revealed its weakness and that’s a good thing. But I have got to wait for the better entry. So again, decision, looking for the right action, this isn’t it. If the stock starts to rally up a little bit, boom. That’s when I take action and that’s when I short the stock.
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