MorningWord 7/24/12: AAPL’tastic

by Dan July 24, 2012 8:34 am • Commentary

MorningWord 7/24/12:  As  many readers know we have a little love/ hate thing going with AAPL for the last 9 months or so, the love is mostly reserved for the products and the company’s near flawless execution, and the hate primarily for the hype around the stock, which to be fair the company has little control over. (CC- editor’s note – Wha?! Hype is their biggest product)

To be contrarian  for the sake of being contrarian in a stock like AAPL could have been near fatal for the last 3 years as a trader, so we have tried to pick our spots.    In many ways the story and the price action of late has become far more rational since the stock declined about 17% from the blow-off top and all time highs made in early April, as the stock has settled down a bit at the mid-point of the 4 month range.

1 yr AAPl chart from Bloomberg

While the fever has broken a bit from a price action perspective, the hype in the media has also cooled down a bit, as it appears the financial press and the Wall Street analyst community have gotten a bit used to the company’s methodical product release schedules (ie. iPad release April and iPhone release Oct) and they find refreshes to iMacs/Macbooks/iPods as an added bonus.  I will mention that the blow-off top in April did correspond with the fever-pitch speculation about AAPL introducing an iTV by Christmas and it seems once that talk subsided, so did the irrational price-action.

On another note, I have graced the screens of CNBC on that nearly award winning program Options Action since April 2009, and I think that this past Friday’s show might be the very first show prior to AAPL’s quarterly earnings report that we did not preview the event in that time period.  Additionally on my weekly fly-by on CNBC’s Fast Money program the AAPL chatter has probably decreased  80-90% on any given day in the last few months from the prior few quarters.  MAKE NO MISTAKE ABOUT IT, THIS IS BULLISH FOR THE STOCK, OR MIGHT I SAY LESS BEARISH IF THE COMPANY DOES HIT A ROADBLOCK IN THE NEAR FUTURE.

None of the above comments constitute a bullish posture on my part, just some quick anecdotal observations of the sentiment surrounding the stock, from a guy who has recently loved to hate the euphoria in the name.  The Fever has Broken, and maybe just maybe the stock may trade like a mere mortal in the months, years to come and cynical guys like me could actually own it without fear of joining the mania.

Please stay tuned for a detailed quarterly preview, and commentary around trades that we are considering on Quick Hits throughout the day.