Option Trade
Apple Inc. (NASDAQ:AAPL) Calls 
Wednesday, 12th October, 2016

** OPTION TRADE: Buy the AAPL JAN 20 2017 120.000 call at approximately $3.75. Place a pre-determined sell at $7.00.  

Note: No protective stop losses added -- but if you wish to do so make it $1.50.            

by Ian Harvey

October 12, 2016

Apple Inc. (NASDAQ: AAPL), a company that designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications, is still running hot despite the market taking a downturn yesterday.

Apple is seeing plenty of bullish forecasts. Apple is in the midst of opportunities for market share expansion placing the company at a welcome, competitive advantage.

Things are looking good for Apple amid a strong iPhone 7 U.S. launch -- “healthy” data points presently indicated in China, and it’s arch-rival Samsung literally exploding in Apple’s dust with the disaster that has become of the Note 7.

On back of a “stronger than seasonal” third quarter it is believed that “the doom and gloom” around Apple is starting to thaw.

The tech titan is likely to remain as a top pick for the second half of 2016 and plenty of analysts are bullish – one such, for example, is top analyst Brian White, from Drexel Hamilton, who reiterates a Buy rating on shares of AAPL with a $185 price target, which represents a 57% increase from where the stock is currently trading.

White notes, “In early September, a flurry of media outlets reported the Galaxy Note 7 was catching fire and exploding, forcing Samsung to halt shipments of the new device. Today, the NY Times reported that Samsung will stop producing the Galaxy Note 7 and we believe this provides a tailwind behind what we believe is already a healthy iPhone 7/7 Plus launch.”

“With original market expectations for approximately 10-14 million Galaxy Note 7 units in H2:2016 (availability began on August 19), we believe Apple has an opportunity to pick up at least 8 million incremental units in CY:16. Moreover, this fiasco could permanently damage the Samsung brand in the smartphone market, a big opportunity for Apple to gain market share,” White concludes.

Apple has a market capitalization of $614.61 billion, a PE ratio of 13.30 and a beta of 1.22. Apple has a 12 month low of $89.47 and a 12 month high of $123.82. The company has a 50-day moving average price of $110.36 and a 200 day moving average price of $103.24.

Analyst Input

Apple Inc.‘s stock had its “outperform” rating reissued by analysts at William Blair in a research report issued to clients and investors on Monday.

Also, several other equities research analysts have recently commented on the company.

  • Cowen and Company reaffirmed an “outperform” rating and set a $125.00 price target on shares of Apple in a research report on Tuesday, June 14th.
  • Needham & Company LLC reaffirmed a “strong-buy” rating and set a $150.00 price target on shares of Apple in a research report on Tuesday, June 14th.
  • Sanford C. Bernstein reaffirmed a “buy” rating and set a $135.00 price target on shares of Apple in a research report on Tuesday, June 14th.
  • Goldman Sachs Group Inc. reaffirmed a “buy” rating and set a $124.00 price target on shares of Apple in a research report on Tuesday, June 14th.
  • Finally, Bank of America Corp. reaffirmed a “buy” rating and set a $120.00 price target on shares of Apple in a research report on Tuesday, June 14th.

Four investment analysts have rated the stock with a sell rating, nine have issued a hold rating, forty-one have assigned a buy rating and two have given a strong buy rating to the stock. The company presently has a consensus rating of “Buy” and an average price target of $126.13.

Harvey’s Options Volatility Indicator

Conclusion

Therefore, based on the facts above,  and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

** OPTION TRADE: Buy the AAPL JAN 20 2017 120.000 call at approximately $3.75. Place a pre-determined sell at $7.00.  

Note: No protective stop losses added -- but if you wish to do so make it $1.50.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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