DailyPlay – Opening Trade (AAPL) – April 12, 2024

AAPL Bullish Opening Trade Signal

Investment Rationale

After lagging behind the market since July of last year, AAPL’s underperformance is starting to emerge as an opportunity. With its recent announcements of integrating AI into its iPhone and Mac lines, there is a thesis for AAPL to start playing catchup with the rest of the tech sector. 

Technical Analysis

AAPL has been rangebound between $165 and $200 for the past year and just bounced off the major support level yesterday. This creates a favorable risk/reward ratio for long exposure with stops below $165 and an upside target of $200. 

AAPL – Daily

Fundamental Analysis

AAPL now trades at only 25x forward earnings as its price declines while analysts revised its EPS growth up to 13% YoY on the back of strong sales and gains in its subscriptions business. These valuations are starting to become more attractive, especially with their AI-focused chips in the upcoming generation of ARM-based silicon. 

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 6 Contracts May 17th $175/$185 Call Vertical Spreads @ $3.75 Debit.

Total Risk: This trade has a max risk of $2,250 (6 Contracts x $375) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $375 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is bouncing higher off support.

1M/6M Trends: Mildly Bullish/ Bearish

Relative Strength: 3/10

OptionsPlay Score: 105

Stop Loss: @ $1.88 Credit. (50% loss of premium paid)

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 Thursday’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