“A falling apple was said to inspire Isaac Newton to articulate the law of gravity,” Alex Rosenberg writes for CNBC. “More recently, stagnant shares of Apple could have inspired his first law of motion: ‘Every body perseveres in its state of rest … unless it is compelled to change that state by forces impressed thereon.'”
“In the past few weeks, the tech giant has been glued to the $120 level. The stock has closed less than 1 percent away from $120 in each of the past 11 sessions,” Rosenberg writes. “It has closed less than 0.2 percent away from $120 in each of the past six sessions. And in two of those sessions, it closed at $120 exactly.”
“There is something special about the $120 level,” Rosenberg writes. “Last Friday, a huge bundle of options expired on Apple, and the most popular striking price for those options was $120. A large options holding tends to ‘pin’ a stock to the most relevant level, which helps explain why the stock closed on Friday at $120.00. Since then, investors have apparently seen little reason to push the stock far from this well-trodden level. ‘You’re seeing an influx of buyers and sellers at this level,’ options trader Andrew Keene of AlphaShark observed. ‘But earnings will move the needle a great deal.'”
Read more in the full article here.
MacDailyNews Take: We’ll find out how Apple’s holiday quarter (fiscal Q117) went next Tuesday right around 4:30pm Eastern.
On October 25, 2016, Apple provided the following guidance for Q117:
• revenue between $76 billion and $78 billion
• gross margin between 38 percent and 38.5 percent
• operating expenses between $6.9 billion and $7 billion
• other income/(expense) of $400 million
• tax rate of 26 percentWe plan to cover Apple’s Q117 conference call at 5pm ET on Tuesday, January 31st with live notes as usual. That link will appear on our home page around 4:45pm EDT earnings day.
SEE ALSO:
Apple to release Q117 earnings, webcast live conference call on January 31st – January 18, 2017
Ironic that the guy says that earnings will move the needle on the stock price. In a sane market it should be anticipated future earnings that drive the stock price. The current churn is being generated by entities less interested in Apple and more interested in numbers on a spreadsheet.
These are not the investors you want. Although they play in the market, they understand little about what makes companies and markets tick and generally have a heard mentality. Which is why I say to hell with the investors and the stock price. Neither are worth Apple’s time and energy.
Tim has more pressing problems to worry about, such as the dire state of the Mac lineup, buggy software releases, and the general loss of confidence of the formerly faithful who have been their most ardent supporters and front line salesmen/women.
You use the term investors where traders would be a more appropriate word.
Traders have a herd instinct, are only concerned with short term gains and are easily manipulated, while investors believe in the company and have invested their money with a view to the long term.
Well said, alanaudio!
One would have thought that by now governments would have rules to clearly delineate traders/speculators from investors to ensure the stability of the market. Unfortunately the world economy is now dominated by short-term whims of traders, a house of cards based on quarterly profit. Investors and companies with a long term strategy are penalized.
Conviction, patience and massive Due Diligence are paramount for an investor…. imo the only way to battle the short term swindling manipulators…
Agree. My flawed terminology above stands corrected. But I’ll be damned if I can figure out what metric could be used to differentiate investors from traders.
I would suggest that a metric might be a combination of time held and reason for selling.
Traders sell on a whim to make a fast buck. Investors ride out the short term fluctuations which spook the traders and only sell when there is a compelling reason to sell.
Personally I use a combination of investing and trading. I mostly have long term investments in Apple, but I do have a tranche of AAPL which I trade more actively and I will be selling this afternoon in anticipation of a drop next week after earnings are reported. My actively traded AAPL has performed much better than my long AAPL over the last couple of years, but I don’t have any complaints about either of them.
There are many events which cause predictable rises and falls in AAPL, usually for illogical reasons and while I would prefer that AAPL didn’t fluctuate in that way it seems silly not to exploit the opportunities created by herd behaviour.
Being a UK resident, my investment in AAPL is also greatly affected by the dollar/pound exchange rate and it’s currently an opportunistic time to sell with the dollar currently high and the pound low, both coinciding with a modest surge for AAPL.
Being on the other side of that dollar/pound equation is painful for me as I have financial interests in the U.K. I was born a Yank but half my family are U.K. citizens. I wasn’t for it but if they’re going to do Brexit then I wish they’d hurry up and get it over with.
Thank you JWSC. Spot on. √
(BTW: ‘Herd’ mentality. I’m not complaining.)
On the idea that options pin the market versus manipulation search for
Yavni Bar-Yam, Marcus A.M. de Aguiar, and Yaneer Bar-Yam, The $500 AAPL close: Manipulation or hedging? A quantitative analysis. arXiv:1402.0910 (September 3, 2013).
These people are definitely not investors. No serious investor needs to listen to some analyst changing their mind every other week. Whatever happened to the days when an analyst would give a 26 or 52 week price targets. Now it’s like they’re changing their price targets every month or so every time they hear some small thing happening that may not even be true. Why not at least an entire quarter pass before making some prediction. How they like to pile on their negative spins right before earnings when it comes to Apple.
I’m not really concerned about analysts pointing out where Apple has gone wrong but it’s very annoying to have to listen to these crooks constantly pushing problems Apple has that no other company seems to have. They’re just beating a dead horse always trying to single out Apple with bad news. It’s as though they keep having to remind potential Apple investors not to buy the stock because it’s a bad bet.
They have their interest in mind first… win at all costs.. including deception and your lose….. there is no such thing as ethics in WallStreert …..You are kind to call them just Crooks!
…which helps explain why the stock closed on Friday at $120.00. Since then, investors have apparently seen little reason to push the stock far from this well-trodden level.
A stagnation that apparently is over, seeing as the stock is currently:
AAPL: 121.955 (+1.985, +1.65%)
Analysts…