2012-11-20

Is $AAPL ripe for another bite on long side?

Does the turn around from 507 area signifies a trend change?

Disclosure : No position now but on watch for long.
EDIT 14.Dec.2012: The long set up in AAPL did not play out. As mentioned in comments below, the trend is still short.

I am not a stock trader but I do dabble into some popular US stocks from time to time with small position as a proxy for broader market investor sentiment. I have mainly traded AAPL from short side for sometime with reasonable success. Of course, there will be charts on internet which will show that $10,000 invested in AAPL 10 year ago would have been $667,000 by now. Well hind sight is beautiful, but neither was I trading 10 years ago nor did I have $10,000 to invest/trade.
Before the option expiry on 16th November 2012, I have been commenting about a lot of puts being purchased on AAPL to protect from downside. AAPL was in down trend since 25th September 2012 after hitting its all time high and progressively the options skews were indicating that lot of protection being bought.

2012-11-10

$AMZN : An Amazing Short

Is this another bubble collapsing?

Disclosure : I have a small short via ITM puts.
Recently a friend of mine mentioned AMZN on one of my facebook post about AAPL. I do not trade stocks much and I am certainly not an stock analyst nor do I “trade” on longer term views. However the conversation made me do a very basic research on AMZN. In short this is what I find:
  • AMZN annual revenue growth is about 40% per year based on last 3 years. On trailing 4 quarters basis it has flat lined and annual revenue growth rate is expected to be 20%-25%year on year. i.e. TOP LINE is not growing as fast as people expect(ed).
  • AMZN net profits after all mumbo jumbo are flat to declining for last 3 years. On trailing 4 quarters basis, they are declining. i.e. BOTTOM LINE is under pressure.
  • On trailing 12 months basis, the shares are trading on an amazing 2500+ PE. Even on Forward Earning estimate basis the shares are trading on 100+ PE.
Source Yahoo Finance

2012-11-08

$AAPL - Another day another support broken

550 Support is now broken.... 520-500 is next possible area to watch.


The trend remains firmly short for the stock market darling $AAPL. In some sense, the success of the company has somehow become the curse for it. On fundamental ground there are still some good reasons to buy AAPL given the cash pile, low forward earning multiple and the relentless growth story. However nothing can go on increasing at exponential pace, except Fed balance sheet :-). AAPL as a stock is present in practically every US investor account including leveraged to the hilt hedge funds. Also it would be one of the few things showing healthy profit if it was bought at good time - something which can be liquidated easily in case of the dreaded margin call. Being high beta, it has been a popular proxy stock for chasing market performance. So when the time to exit comes, the exodus is not expected to be smooth.