Author: Andrew Keene
S&P Emini Pivot points for 11.21.2012
Apple & Google Pivot Points for 11.21.2012
Would you "like" FB, ZNGA, or GRPN? 11.20.2012
There is no question that FB is richly valued by traditional metrics, but the counter argument is that these are not traditional times and future prospects justify said valuation. Eloquent arguments can be made from either side, however while others are fighting lets try to make some money. FB is trading around $23 at last check. In order to have smooth sailing into the 7/27/12 earnings gap, FB needs to break and respect overhead resistance. The day of the formerly mentioned earnings had a high of $24.54; we can call that level 1. The following day FB opened at $24.04; our level 2. It is interesting to note that our level 2 resisted a recent gap up because of earnings on 10/24/12; indicating a strong ceiling and a selling opportunity. It is even more interesting to note that the high on Friday, 11/16/12, was pennies below our level 2, further strengthening our thesis.
Every time FB has made it up here in the sideways channel it has only taken a day or two to be promptly rejected. This may lead one to believe that price could break either way, and quickly. The ‘at the money’ straddle is trading for about $1.25 for the weekly, or about 5.3% of the stock. Given that the pattern may fail or take time to play out weekly options could be risky, but then again it only took five trading days for FB to move from $19 to $24. This could be partially explained by the 7% short interest in the stock and the fact that it is hard to borrow.
Similar names like GRPN and ZNGA have taken advice from AA, being perpetual earnings disappointers. FB probably should not be clumped into a basket with these stocks for FB is different, but then again that is what they all say.
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S&P Emini and Unusual Option Activity for 11.19.2012
S&P Emini Pivot Points for 11.20.2012
Apple & Google Pivot Points for 11.20.2012
AAPL Range Analysis: Technicals and News Update 11.19.2012
The pullback, since hitting $700, has lasted 39 trading days, more than any other pullback of late. The length of time the bears have been in control is unusual by AAPL standards, but also the range is unusual. The average range of this pullback is $15.67. Traders on Friday saw a massive range. As indicated before, AAPL had a range (high to low) of $24.25 or 4.59%. This is outside 1.5 standard deviations of the mean. Meaning that 83.6% of the observations were below this. In addition to this, the volume on Friday was massive. 43 million shares traded hands. The last time AAPL traded that much volume was on 3/13/12’s ‘gap and go.’ While these are interesting quantitative observations, qualitative observations are important too in stock analysis.
Given the unusual nature of Friday’s action, a short-term bottom could have been built. Volume may indicate a ‘wash out’ and the price action could be confirming given the massive hanging man. The other side of this trade is clear however. AAPL has dominated for a long time now. They were formerly the underdog, but now they are the firm to beat.
A massive trend line connecting AAPL’s bottom to the flash crash low and finally touching the 6/20/11 bottom, sits only $50 away from Friday’s low. Given the $20 at the money weekly straddle, this is not out of the question in the short term if the market takes a dive.
In related news AAPL is expected to produce a slick flat screen LCD or LED HDTV by next year. Perhaps one can expect it to look similar to the new iMac given that skinny design.
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