Application developers around the world will be focused on Apple in June. The Worldwide Developers Conference or WWDC begins on June 5th for five days.
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AAPL - Apple Inc - Company Profile
Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players to consumers, small and mid-sized businesses, and education, enterprise, and government customers worldwide. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications. It offers iPhone, a line of smartphones; iPad, a line of multi-purpose tablets; and Mac, a line of desktop and portable personal computers. The company also provides iLife, a consumer-oriented digital lifestyle software application suite; iWork, an integrated productivity suite that helps users create, present, and publish documents, presentations, and spreadsheets; and other application software, such as Final Cut Pro, Logic Pro X, and FileMaker Pro. In addition, it offers Apple TV that connects to consumers' TV and enables them to access digital content directly for streaming high definition video, playing music and games, and viewing photos; Apple Watch, a personal electronic device; and iPod, a line of portable digital music and media players. Further, the company sells Apple-branded and third-party Mac-compatible, and iOS-compatible accessories, such as headphones, displays, storage devices, Beats products, and other connectivity and computing products and supplies. Additionally, it offers iCloud, a cloud service; AppleCare that offers support options for its customers; and Apple Pay, a mobile payment service. The company sells and delivers digital content and applications through the iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, and Apple Music. It also sells its products through its retail and online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. Company description from FinViz.com.
The eyes of the world will be focused on Apple in two weeks as it updates application developers on all the new features and software in its various products. This covers the iPhone, iPads, Macs and Watches. Apple routinely tries to keep from giving away its best secrets but it is impossible for developers to develop unless they know what they are developing. There are always leaks. This typically provides a boost to Apple shares.
Apple reports earnings on August 1st. That is getting close to the normal September announcement date for the iPhone 8. If the buzz from the developers conference is good we could see shares rise into that earnings report.
Shares have been flat for the last three weeks despite the constantly rising Nasdaq. The WWDC could be the catalyst that lifts Apple shares out of this consolidation pattern.
I am using the August strikes so the earnings expectations will keep the premium inflated. I do not plan on holding over earnings. We will exit in July or earlier depending on how the stock reacts to the WWDC news.
The August strikes are expensive so I am recommending a spread.
Buy Aug $155 call, currently $5.05, initial stop loss $148.85
Sell short Aug $165 call, currently $1.72, initial stop loss $148.85
Net debit $3.33.
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