Apple's share price still has room to go on the upside
As the company is preparing new products later this year, a bullish trend is likely to be established after the stock has rallied heavily after the earnings report in Wednesday. While sales of the iPad have disappointed somewhat, the iPhone and the MacOS line up of computers is doing pretty well and will most likely drive prices to above $600 soon.
While many analysts have been skeptical about the outcome of Apple's first quarter of 2014, the results that the company has presented have been stellar with it setting yet another profit record for the quarter. The main news however were not the metrics, nor the buybacks, but the prospects for the future.
Apple is very likely to announce a long rumored iWatch later this year, as it is preparing an update for its operating systems iOS and MacOSX Mavericks. On the 2nd of June the company will hold a developer conference where it usually releases information about the updates which its customers might expect in the future.
Our opinion is that at current levels in the short term the company's share prices are a bargain and we would be looking to purchase call options for tonight's expiry, as we keenly await how will the latest batch of uncertainty out of Russia will impact the US stock market.
On the charts, looking at key levels we have identified the first buying point to be a dip towards $565. With the price currently trading around 569.60 we are of the opinion the key to the upside is a break above $570. We will be taking the opportunity to buy daily calls in case we see a sustained break above.
On the downside the key to a successful trade lies below $560. If we see an hourly close below that level we would get a bit cautious about buying further daily calls. Only a sustained daily close below $560 would make us switch our bias to buy daily puts.