By now, you already know that Apple (AAPL) missed earnings and had lower than expected sales. The question now is “How do you trade it?” Personally, I’m coming into the day flat and looking at the levels established in after hours trading.
If you look at the after hours trading, you see that immediately after the earnings announcement, the stock put in a pivot low at $565 after a huge move downward. After that, it really just based around. If the stock can’t get above $580 and fill a big portion of this gap, AAPL might be out of play for awhile with another lackluster quarter possible ahead of the release of the iPhone 5. Many firms are coming out and saying AAPL is a buy on any weakness today, and I don’t disagree.
(click to enlarge)
All in all, I think there will be opportunities to make cash flow trades throughout the day today, but don’t be all in. As a trader, keep it light and know your ranges and your levels.
Here is a daily chart showing the support levels to watch and where it hit after hours.
(click to enlarge)
Disclosure: Scott Redler is long SPY puts
Leave a Reply