Apple is set to open at a record high Wednesday, with a market capitalization exceeding $830 billion, after the company reported better-than-expected earnings. China revenue fell, so improvement in the Asian markets could assist next quarter.
Apple Lotto Play
We took a lotto (bet) play on earnings, utilizing the AUG155C, (1.35 avg.) that we will cash in at the open. If you sold covered calls, consider waiting for the initial profit taking to subside and buy the calls back (BTC). Once price starts to rise again you can sell covered calls to capture heightned premium and the increase in volatility (impVol).
The breakout zone at 156.65 (+/-) is now support.
Apple Component Providers
Also consider parts providers. Apple won’t be the only company to benefit from the new iPhones. Two key suppliers are right in the eye of the storm as well: Broadcom AVGO and Skyworks Solutions SWKS.
Both stocks have pulled back over the past week and could see a surge over the next few days. VBP support (histogram on the left) should hold. Look for a continuation day for confirmation.
SWKS is on the watchlist for the week. Note the commentary before taking a new position.
Technology Stocks and Semiconductors
FANG stocks and the tech sector (XLK) are higher, as we start the trading session. Many of our existing positions, like MOMO have seen growing open interest. Look for MOMO to continue higher in today’s session.
MOMO 60-minute looks ready to push higher.
Banks and retail were strong the past few sessions. We are watching these two industry groups for new positions and/or add to existing positions.
DOW 22,000 and NYA 12,000. Round numbers tend to be resistance, so this is a reminder to watch them too, for any signs of a fade at ATH.
Have a great day. We’ll be LIVE around 9:20AM.
Vinny