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July 30, 2019 | For Apple Traders, All News Is Good News

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Apple shares took an exuberant leap Tuesday evening, propelled by strong revenue growth announced after the close. DaBoyz were able to trigger off a short-squeeze because revenues increased with iPhone sales in a relative funk. This likely surprised many traders, since they had been hearing about iPhone’s slump in the U.S. and China for the last two quarters. However, a look behind the numbers suggests that AAPL’s nearly 4% rally may have been undeserved. For one, although it’s true that every area of the company’s business other than iPhone grew, the 13% rise in revenues for iPad, Mac and services including music and the apps store was the smallest quarterly increase in nearly four years. Also, profits actually declined for the third straight quarter, falling 13% to yield a slightly-higher-than-estimated $2.18 per share.

A Competitor Shows Pluck

There was one more reason to view the after-hours rally as at least mildly heedless: Huawei, an increasingly strong competitor in smartphones, announced very strong revenue growth despite the company’s blacklisting in the U.S. Under the circumstances, if Trump strikes a trade deal with China that takes some pressure off Huawei, look for AAPL to give up today’s gains in a trice when the news hits the tape

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July 30th, 2019

Posted In: Rick's Picks

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