Wednesday, December 27, 2006

Dummy Trade of the Day - Apple Computer, Inc. (Public, NASDAQ:AAPL) Cont'd

Here's a completed view of the AAPL trade. I spent a lot of time on this entry and the only thing that kept me hanging in was the volume pattern on the 5 minute timeframe below. The volume was much higher on the early rallies than on the pullbacks. The 15 minute timeframe really didn't look all that compelling and I was hoping that it wouldn't just trade sideways all day as I had invested too much time on it. The trigger was the close of the 6th bar on the OR high. The entry was a break of the sixth bar high. The blue lines represent support and resistance areas. I took a partial profit as price approached $80.00 because on the daily chart, this was a key technical area and secondly because of the round number significance.

The chart below shows the AH trade. The last bar traded over 125,000 shares. And notes the following:

Chief Executive Steve Jobs was given 7.5 mln stock options in 2001 without the required authorization of the board of directors, The Financial Times reports on its Web site, citing people familiar with the matter. The FT reported that records that purported to show a full board meeting had taken place to approve Jobs' remuneration, as required by AAPL's procedures, were later falsified. The sources said that those records are among the pieces of evidence being weighed by the U.S. Securities and Exchange Commission as it decides wither to pursue a case against the co or any individual over the affair. According to a 2002 filing by AAPL, the options under review were handed to Jobs in October 2001, at an exercise price of $18.30 a share. However, the FT said, the purported board authorization was dated near the end of the year, suggesting the benefits were both not properly authorized and were backdated. Jobs later surrendered his options before they were exercised, implying that he didn't gain any direct benefit from them. he was later given a grant of restricted stock by AAPL instead.


Yaser Anwar, CSC (Trader- Equities & FX | Quoted 6 Times In WSJ, Twice in NYT & FT) said...

The only thing that will 'cause AAPL to drop on high volume is the macworld. That is like the catalyst for AAPL next month and the earnings.

An investor could not ask for a stronger stock- it has some of the best fundiz and the most support by inst. guys- my friend who works at PCS in ML told me every one of his client wants more on a pullback.

Which is all great. To be honest I wish they don't announce shit in the macworld- I can just image the red bars popping up on the screens- it will result in a shakeout and people who understand aapl fundamentally will be able to take good positions at cheap prices.

Jamie said...

Thanks for the info Yaser. I guess the stock option fraud story was ripe for fading especially since the stock had already pulled back to a key support level.

But now we have a big gap from Thursday's high to Friday low. When is that gap going to get filled? If it gets filled in the very short-term, it will create a higher low and another buying opp :)