I’m shortening the Apple moment when it enters its battle on developers (Nasdaq: AAPL)

Recent analysis On Apple (Nasdaq:AAPL) On Seeking, Alpha concludes, not with a Metis-Reversion thesis, but with Vegan’s thesis. At the time of publication, I was recommending that my customers follow me by shortening the stock. Let this article be my point, the logic for shortening my AAPL again.

The last time I shortlisted AAPL was just before the pre-Corona market peak. Some might say I’m lucky with my time and my new short lacks the rest of the epidemic novel catalyst. Reasonable enough, but consider my reasons for the pending backback before dismissing me.

Apple is at war

Shorten my previous AAPL Partly on the severity of the SARS-KVV-19 (known as 2019-nCoV at the time of writing) and misinformation about its impact on the Apple Pal supply chain. Depended. Through my many analyzes on the examples of Apple Pull investors, I have found that Apple Pull investors are overly optimistic about the bad news. That is, they will leave the stock only when they do not turn the situation in their desired direction, excluding the negative impact of potentially negative catalysts.

While at present we do not have the previous atmosphere of “it’s just a flu” in terms of COVID-19, but we have a similar atmosphere in the App Store considering the developer’s disagreement. From Facebook (Nasdaq:FB) In Epic Games, developers experience abuse by Apple Pal, citing improper treatment and (allegedly) exorbitant transaction fees. Apple Pal, of course, claims that the 30% transaction fee is both fair and nothing new – the rate has been stable since the inception of the App Store.

If you’re confused as to why so many companies are suddenly complaining about the long-held standard, look no further than Apple’s recent business transaction shift: from products to services. While Apple Play previously served as a platform on which businesses could launch and distribute services, it is now competing directly with many of its customers. Is the company With subscriptions bundle It can effectively push its app store clients towards lower revenue, while it still takes 30% sweeter.

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Clear bias in Apple Moment

Simply put, Apple competes with its competitors when it owns the PL platform. That is, StorePull Service A and External Service B, should be in direct competition with the StoreP Store, the services should be given equal value, and the same is popular, Apple Pal still tops the list by collecting 100% of its revenue and increasing it by 30%. Service B income; This does not describe a fairly competitive environment.

The developers are upset at the thought. Like the SARS-CoV-19 in February, this is an issue that is not going away but is growing in size. Developers who are more upset than Apple have more power to effectively boycott or change app store policies. Apple needs a vaccine.

No winning strategy

Unfortunately, since 30% of StorePal’s revenue comes from App Store distribution, any change that appeals to developers would hinder ApplePal’s revenue. Scenario Pal is the best position to reduce its 30% transaction fee. Bad situations include draw-out legal battles that change the business model and lead to a complete on-boycott of the App Store, driving developers (and customers there) to other distribution platforms. In any case, Apple sees a pal less economic number. Declined profits and earnings will be reflected in earnings reports and pull the stock – a stock that trades at all-time highs, overbought and dot-com level valuations. This is not the time to rule out the possibility of Apple Pal’s stock declining.

As earnings share prices rise, the issue could mark a temporary peak for Apple’s share price. The time corresponds to Apple’s seasonal pattern of pulling back to September – and the general seasonal pattern of the market. I should remind readers that I am not an Apple Pull Bear, but write a warning about this stock when I believe that pullbacks are nailed, you can see My numerous articles on Apple Pal in the past.

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Historically, the worst month of the Apple moment (read: likely to underperform) is September:

(Source: Daemon Variety; Data from Tingo)

This is how I issue such a warning. Now is not the time to rejoice even though AAPL has hit new heights. Apple Pal’s battle with its App Store developers won’t end with Apple Pal winning – at least in the short term.

I encourage you to follow me in shortening this stock. Here is the play and technical aspect supporting the play I recommended on Monday. On Wednesday, at the time of writing, I believe the following option strategy is still valid.

How to trade it

The flow of money into AAPL is weakening, and usually happens when you want to open short positions. Typical pullbacks will put us in the range of 110 to $ 115. The key is passing 125 below the support level.

We also have an open distance of about 8 118. This seems to me like the distance of a field. Our pullback goal is tangled with the idea that this is an area difference, allowing the gap to fill our holding period.

Of course, a lot of this technical stuff is just to support the seasonal game. My goal is to hold only in September, when I expect a pullback. It is a simple seasonal trade with a holding period of up to one month.

I want to sell the call. But you can also go with long putts. I just think Putts is a little expensive right now (putting on most tech stocks).

Sept. Sell ​​18 $ 132.50 calls.

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Jan. Buy 15 $ 130 laying.

Selling calls carries an unlimited upside risk, while buying putts can only put you at risk for debit on put options. Go with what is more appropriate for your risk tolerance.

Happy trading!

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Advertisement: I / we short AAPL. I have written this article myself, and it expresses my own opinions. I don’t get paid for it (except for finding Alpha). I have no business relationship with the stock mentioned in this article.


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