Apple pops? Here’s your trade for tomorrow morning. (July 26, 2016)
AAPL
We’re looking at Apple ( NASDAQ:AAPL ) today. Note, this is the 200-day moving average right here, which is where the stock failed the last couple times, but I just look at this as one time. Here, I guess maybe 4 times that it’s tried to break thorough, it’s not been able to do so. The company reports earnings, they beat by 4 pennies. It was expected that they’re making 138.00ish, instead they made a 142.00. Tim Cook is really happy with the iPhone sales. Of course he’s being a little pessimistic, which is easy for him to do because they’ve kind of stunk up the joint with the stock price. So, hey man, you can’t penalize somebody for honesty.
BUT, here’s the deal, if you look at the stock after hours the company reports, breaks higher up here, and then kind of oscillates around a bit. Here’s the thing: You can see on the 5-minute chart, really nice volume after hours. You’re probably going to see some upgrades tomorrow, some price target revisions. This is all good stuff. I really want to see the stock break through the 200-day moving average. I’ll say this: If you’re long the stock, and I know a lot of you secretly love Apple ( NASDAQ:AAPL ), you’ve bought high and sold low countless times. The more times you do that, the more firmly you become entrenched in the idea that Apple ( NASDAQ:AAPL ), that this pullback is all wrong. Ultimately this stock is going to move higher and it’s all just going to be wonderful. People are going to understand and the realize the error of their ways. You will be vindicated. Okay, good for you.
But this is what I would suggest: That because this is right up a the 200-day moving average, this is just something that not just you and I are seeing. That’s the point. Everybody sees this. This is no secret. The stock is going to gap up tomorrow, over 5 percent. For all we know it could gap up 10 percent. This is after hours this evening. Tomorrow this could gap up even more. What I would suggest doing, and I’m talking to you folks who are already long this stock. Take this as an opportunity to sell half of your position. I personally would sell all of it. And that’s different than shorting. I wouldn’t short this. But I would sell all of it personally, but there’s a lot of people that you’re not going to do that.
For me, I look at this, if I’ve got a chance to make 8 or 10 percent over night, I’ll do that every night. So I would just sell into this, but at least sell half. And then if the stock starts falling back below the 200-day moving average, and that’s assuming it opens up above it. If the stock starts falling below the 200-day moving average, you know what? Sell the rest of it. You can always buy it back. And unless you have been holding the stock for more that a year you don’t have capital gains issues to worry about. It’s only after you’ve held the stock for over a year are you going, “Oh, long-term capital gains. I have a tax advantage.” But if it’s less than a year, who cares if you sell it after 3 days, 30 days or 300 days, your tax treatment is the same. So with this kind of move, I think you want to sell into it. Sell half.
Again, if you’re not long and you want to buy this, frankly, I just think you’ve got to wait. I’m not rooting against Apple ( NASDAQ:AAPL ), I’m glad to see them finally moving higher. I just hope Tim Cook realizes the error of his ways and keeps the hole in there for the earbud thing. As opposed to making everybody go Bluetooth. You can’t tell the customer what to do dude. Steve Jobs could do that, you don’t get to do that. You have to do what the customer wants. Leave the hole in the phone. I’m going to end it right there. Leave the hole in the phone. Sell into this strength. Take some of your profits. If the stock starts falling below the 200-day moving average take the rest of your profits. Those of you that would like to buy Apple ( NASDAQ:AAPL ), I say the typical, wait 3 days and then do it. Wait until Monday, you’ll get a better entry on this stock.
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