Seasoned Stocks: Trade of the Week - Apple, Inc.

[image]( Never Be On The Wrong Side Of Another Historically Repeating Market Cycle Or Trend… Dear Trader, Welcome to this week's Seasoned Stocks: Trade of the Week where we show you one trade you should be looking into for the week. We dive deep and take a look at how this stock has behaved historically during this time period. This is information you are going to want to read. We do this every week for you, so keep an eye out for another one next week. We do not give specific trading recommendations, rather general market information that’s purpose is to provide you an edge in your trading. Now, let’s get into today's report. Today we are going to look at a stock that you may have not heard of, Apple (ticker: AAPL). Haha, a little humor there. Moving along, Apple is simply a great stock, and a wonderful company. That said, I’m not gonna pepper you with a bunch of macro fundamental things. Although, I’m not discounting their value. Now, If you go back and look at almost the past 4 decades in Apple, it’s got a nice little seasonal run period that we are coming into over the next few weeks or so. Below you will see that Apple, since 1984, has gone up 78% of the time. That’s an excellent %, based on nearly 40 years of data. The Average Move Up is 6.26% over a 12-day trading period, which is a really nice move in the stock. If you traded a bullish to neutral option position, then it’s a much higher ROI%. [image]( In the past 5 years it’s gone up 100% of the time... [image]( Below you will notice that roughly 2/3rds of the time Apple has reached a High Point of 5%+ over this 12 trading day timeframe, which can mean good things for stock traders, and definitely for option traders from an ROI% perspective. Another thing to focus on is the downside, there’s really only one year (1997) that you would really need to defend your position if you were a bullish premium spread seller. I do not want to get too deep into this topic, but if you sell credit-based spreads 10% OTM and/or at or around the 1 STD level (usual -15-ish Delta), then you would have very very likely had a winning strategy in hindsight. In the 1997 situation, you could roll out the position over time, and likely get it back into profit, or get it back to break-even. If you made the decision to not roll the position(s), you are still looking at a potential winner 97% of the time with the aforementioned approach. [image]( Below are our Technical Analysis Widgets, these show a composite sentiment of multiple technical indicators on specified timeframes. Currently Apple is showing… The Daily = Buy... The Weekly = Buy... The Monthly = Strong Buy [image]( [image]( [image]( If we take a look at the sector ETF (Technology Sector SPDR: XLK), since 1998 it’s showing a seasonal tendency to push up as well over the next month. This is always nice to have alignment with the given stock. Also, take note, the sector has a tendency to pick back up again towards the end of October and on into the year-end rally. See below: [image]( Below we will look into an algorithm that encompasses AI and machine learning to give best-efforts forecasting. This is by no means a guarantee of anything, but in essence it’s saying that over the next 20 Trading Days, Apple stock has a strong chance of moving up somewhere into the +5-8% “zone”. The AI-generated odds range from 73-85% of that happening. This is a general speculative target, again there’s no guarantee---simply what the algo spits out. Pattern Matching 20-day Daily Performance results for Apple Inc. are calculated as of 2021-Aug-05 (about 19 hours ago): [image]( It’s showing an Mean/Median move up of a hair over +5.5%, and the 20-Trading Day period, with an Frequency of occurrence at 85% [image]( Historical Analogues for Apple Inc. are calculated as of 2021-Aug-05 (about 19 hours ago): [image]( It’s showing Mean/Median moves into the +5% range in the next 20- Trading Days, with 73% Frequency odds of a bullish move. [image]( Long story short, things look positive for Apple at the moment. Let’s look at TipRanks...a Smart Score of 10 is wonderful, generally speaking. [image]( Speaking of a perfect 10 score...TipRanks past 10 year track record, with a Smart Score of 10, has increased alpha over and above the S&P 500 is +227.7%...so take it for what it’s worth, hopefully it gives you an edge in the future. See below: [image]( Now let’s look at an option chain to see if we can gain some insights. Here’s what I see, and what it tells me. If I look out to the next 21-days at the 8/27 expiry, in the 150 call strike options, it’s telling me a few things “at the moment’. The Premium is overpriced vs it’s Theoretical value, think of this as the Kelly Blue Book Value, so I personally have no interest in paying that. I’d offer less, assess a spread or look at a bullish credit spread position. Additionally, I notice a significant cluster of Open Interest and Volume at the 150 calls. This draws my attention that this price level might get tested. There’s no guarantees, but oftentimes this can act as a magnet. Next I look at Delta, it’s at .31, so if I double that it gives me a rough estimate of what my Probability of Touch is...so call it 62%. If you really really want to be more precise with the math, then some chains have the Prob of Touch, in this case it’s 60%. I will tell you, the Prob of Touch intraday is flipping up and down all day, while the Delta can stay more static. As I touched on last week, there’s volatility skews and whacko stuff going on with the greek complexities---basically, don’t sweat it. [image]( So where are we? At the moment, (see chart below) Apple is trading at $146-ish at the time of this writing (Friday at EST lunchtime). A +5% move would be into the $153 level. An 8% (AI-Machine Learning projections) move would be up into the $157 level. If we draw a simple Fib extension, a ‘possible’ target above recent structure $150 high is into the 156-ish zone---this is a commonplace 123% Fib-extension. That’s a good move, and the options market doesn’t expect it, however our seasonals and AI-machine learning algo’s think it’s possible. They are all floating at that 5-8% range in the next 3-4 weeks per se. If we push out about a month from now, to the 9/3 expirations...the options market has clusters of orders at the 150-155 call levels, but the options market does not think it’s that promising at the exact moment (Friday lunchtime) to push up toward $155. [image]( [image]( The chart above to me, ‘appears’ like an Accumulation period by the institutions based on other analytics I reference, which is another long topic for another day. So let’s just see how the market closes today (Friday Aug 6th, 2021), and access things at the Monday open. For me, I’m leaning towards selling premium with a bullish put spread 10% OTM give or take (and/or at or around the 1 STD level ~ usual -15-ish Delta), and close back at 50% profit of the original credit that I can establish. Why? If we push out about a month from now, to the 9/3 expirations (see below)...the options market has clusters of orders at the 150-155 call levels that stick out, but the options market does not think it’s that promising at the exact moment (Friday lunchtime) to push up toward $155. Thus, I’m ‘currently’ bullish/neutral. [image]( Ok. That’s about it, hopefully we’ve given you enough info to chew on. Remember, do your homework, and fully understand the risk before trading anything. To learn more about more seasonal information on Apple and other seasonal opportunities, please click on the link below to access the Seasoned Stocks software: []( Trade Smart, Chad Shirley Caution: Provided as-is for informational/educational purposes only and should not be construed as invest.ment advice. Past performance may not be indicative of future results. Always consult your Invest.ment Adviser before any decision. P.S. 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