Apple shares climbed from $202.75 on Thursday, August 15 to $213.65 on Wednesday this past week, giving “Cut-To-The-Chase Trader” Members a potential profit of 93%. Last Friday, August 23; saw Apple shares back to $202.64, losing 4.6% as the US-China trade war intensified.
Is this another buying opportunity?
by Ian Harvey
August 24, 2019
Apple Inc. (NASDAQ: AAPL) shares climbed after “Cut-To-The-Chase Trader” Members executed a call option, following an “about face” by President Trump's shock move to delay China tariffs. This provided a potential profit of 93% for Stock options Made Easy members. To read about the recommendation click here.
This meant that the news that Mr. Trump had relaxed his hardline stance came as some relief for investors. Apple and other US tech firms make their products in Chinese factories meaning they would have been subject to the additional tariffs.
Trade War Intensifies…..
The US-China trade war escalated again on Friday after China announced new tariffs on US goods. China recently imposed a new round of tariffs on about $75 billion worth of US goods. Plus, China would place an additional tariff of 5% or 10% on US goods in two rounds, one on September 1 and the other one on December 15.
The new tariffs came as retaliation to President Donald Trump’s planned tariffs on imported Chinese goods. On August 1, Trump stated that his administration would impose an additional 10% tariff on $300 billion of imported Chinese goods starting in September.
The situation worsened when President Trump warned that he would respond to China’s retaliatory tariffs. Notably, Trump tweeted that the US would be better off without China. He directed American companies to immediately look for alternatives to China and manufacture products in the US.
Effect on Apple Shares…..
The US-China trade war has caused a lot of volatility in Apple stock in recent months. Apple has significant exposure to China, as key products like the iPhone and iPad are assembled there. Also, China is a key market for Apple. Greater China revenue accounted for about 17% of Apple’s overall revenue in the third quarter.
On Friday, August 23, Apple shares tumbled 4.6%; and then edged down a further 0.4% after hours.
Wedbush Securities analyst Daniel Ives referred to Friday's selloff as "a gut punch to Cupertino." Apple is headquartered in Cupertino, California.
On August 23, Apple stock was up 28.5% on a year-to-date basis.
Apple is already under pressure due to declining iPhone revenues. It is expected that further deterioration in trade relations between the US and China would lead to additional headwinds for the company.
Expect more Trump tweets, Beijing statements and other China trade war headlines over the weekend.
What can you do?
It is very likely that, for the short-term, Apple shares will see further downwards movement as volatility is expected to continue.
If you agree with this scenario that Apple shares will continue to suffer then you may wish to consider the following options trade…..
Option trade to consider: Buy the AAPL 0CT 18 2019 200.000 PUT at approximately $8.00.
If you not a member and interested in being part of this profitable action just CLICK HERE.
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!