DailyPlay – Opening Trade (AAPL) – March 6, 2024

AAPL Bullish Opening Trade Signal

Investment Rationale

AAPL’s recent selloff provides a rare opportunity for investors to add long exposure with a favorable risk/reward ratio. We rarely see AAPL underperform the markets but the past few months have seen AAPL decline as a result of poor China sales. The recent stock price reflects this outlook, but the long-term prospects of AAPL remain both diverse and strong

Technical Analysis

AAPL has been trading in a range between $170 and $197, yesterday it sold off to the bottom end of this range and the risk/reward is now the most favorable for adding long exposure. RSI also dipped to the low 20’s, a level we have not seen since the beginning of 2019, which was followed by a 50% rally in the stock. Since META broke out above its $400 all-time high on its blowout earnings and dividend announcement, META has continued to grind higher, but momentum has slowed considerably and showing signs of exhaustion. This increases the risk of a pullback or at the very least a consolidation as it touches $500. 

AAPL – Daily

Fundamental Analysis

AAPL remains on the more expensive side of 26x forward earnings, and EPS growth has been recently revised up to 11% on the back of strong Mac sales and gains in the subscriptions business. 

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 6 Contracts April 5th $170/$180 Call Vertical Spreads @ $3.64 Debit.

Total Risk: This trade has a max risk of $2,184 (6 Contracts x $364) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $364 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that pulled back and is expected to continue higher.

1M/6M Trends: Bearish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 104

Stop Loss: @ $1.82 Credit. (50% loss of the premium)

View AAPL Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View AAPL Trade