I Shorted AAPL

22 авг. 2020 г.

This is meant to be a bit of an update to the previous idea I had a little while that got featured by the editors on this site. Then, I was mentioning that the stock got a bit overextended and was showing some weakness into earnings. Thank goodness I didn't short it then, as the earnings report was quite strong and AAPL shrugged off the COVID crisis & had a huge quarter. Since then the stock has been in levitation mode, maxing out at a 15% premium to "average" pricing on August 6th. Since, the stock has taken a bit of a breather until Friday, when the stock went back into ramp mode. I think it's a short for the following reasons:

1.) The split is on Monday, something I expect will be very much a "sell the news" event
2.) Market breadth is declining massively, suggesting a general market selloff is in the cards
3.) The stock closed at a 12.6% premium to average pricing, a huge divergence given a complete lack of fundamental catalysts
4.) AAPL isn't a stock like W or OSTK that has huge a huge TAM bid & experienced a narrative shift with COVID and thus can't really continue sliding around like those have % wise.

I'm looking at a short target around 440 or 110 post split. I'm short from 497. Time will tell on this one.