Apple is at a key level and a big move can unfold from here
The biggest company in the world is at a key threshold and the main level to watch out for is $500. If we see an hourly close below this - we would be buying daily puts tomorrow, however if the stock manages to hold its ground for a week without dropping further it could eventually recoup all of its losses until now.
The earnings report that the company released on Monday was a blow-out quarter, however markets have started to doubt the company's ability to innovate and are punishing the share price because of the flop that the iPhone 5C is.
In a rare occurrence, the company's CEO Tim Cook has admitted that there was a big mismatch between supply and demand for the cheaper iPhone. Apple rarely admits to anything and this is a big step in the right direction. However share prices for now look like going down further with the broad market.
This year will be a turning point for the tech giant and it will all be up to the iPhone 6 or whatever its called to restore investors' confidence in the innovation game that the company has struggled to remain on top of.
While the company's CEO attributes the success of the more expensive iPhone 5S to its Touch ID sensor, we do not necessarily agree. The main feature of the 5S is its faster processor and the sleek different metal color bodies available to the users choices.
You can see the dramatic drop after the market closed on Monday and the subsequent lack of rebound. If we look back the company hasn't traded in the $400's since the summer months and any drop below $500 will likely trigger some stops.
To remain on top of our game we would be looking for a sustained hourly close of the company's binary options share price below $500 to buy puts on a daily and weekly basis. Otherwise above 515 the way could open for a substantial rebound and an eventual fill of the gap that formed on Monday.