Friday, 1 August 2014

Trend reversals: BBRY and AAPL

While I've been reading a lot of people saying that AAPL is going to go to $110 or $120 or whatever, I'm starting to notice that it might not be the case. If what I've been learning about following trends is right, it seems that AAPL might currently be near the top of its trend. The game changer for whether it goes past $100 or not will really depend on their sale of the iPhone 6. No one is likely to know how well it will sell until their Earnings Report for their 4th quarter. If they can manage to sell 30m or more iPhone 6 handsets, I can see the trend continuing up. Hard to tell what the mindset of most people in the US is like in regards to the iPhone 6 but what I've been hearing here in Toronto is very little interest to upgrade. Especially since there does not seem to be a major improvement over the iPhone 5s. I can see the trend reversing though if they don't manage to meet sales expectations or at least for there to be a drawdown.

Either way, I'll be selling my Call Option on it in October, shortly after their ER.

Now for BBRY. Right now, the trend seems to be going slowly up. Ever since the change of management that brought John Chen in, the trend seems to have reversed. This might be mostly due to the expectations people have of John Chen as he had been successful in turning around Sybase or it could be due to what he has actually done. I don't know much about fundamentals to be honest. But I do know that the difference in loss of revenue in their last two ER, was a large difference. But whether the trend will keep going up or not for BBRY will really rely on their next ER (possibly the one after). If they show a profit in revenue, the trend will go up more clearly. If another loss, there's a chance for it to go down.

Although I have a Call Option that expires on January 2015, whether I sell earlier or not really depends on their next ER. Especially since it will have an effect on the direction of BBRY's trend. I expect it to be positive though due to the upcoming releases planned.

Edit: I added to my Blackberry position by buying 5 more Call Options contracts. Figured I'll take advantage of the small drawdown.

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