My Apple shorts are still doing well but last night I was going to short at $125 and got distracted missing my opportunity. As a first step at expanding my trading range it was interesting but very volatile experiment. My trading style doesn’t generally like volatility and I tend to stay away from heavy risk. My Apple shorts were for .50 cents so it wasn’t going to break the bank but allowed me to test the waters. I’m taking profits today on any sell off after the stellar results posted by Apple.

So How Are Your FTSE Shorts?
They were doing allot better two days ago and I should have taken profits. I was determined to stick to my plan and trade it till the end resulting in missed opportunities to take profits. Sometimes being too ridged can be a big hindrance but on the other side I have a reputation for taking profits too early.

At present I have three €5 shorts open after one was stopped out yesterday for €90. I have another order to open at 4,065 for €5. My plan is to continue to build up my short and take profits at around 3,900. I’m very comfortable with their being only a limited upside. Once earnings are over which have been better than expected I believe the focus will return to TARP, banks and the myriad of unanswered questions. This will push stocks back and create more headwinds for equities.

Entry: 4000 – 4150 FTSE (September Contracts)
Exit: 3900
Stop (Mental): 4500
Point Size: 20 Euro (5 x 4)
Estimated Return: 2000

Apple never fails to amaze me. I think it’s a strong company and have had an intention to buy shares for well over a year now. I first became interested at $122 and have followed them eagerly since then. My entry price you may be shocked to read is $50. So why do I believe they will reach anywhere approaching that?

Firstly I believe that while one man does not make a company CEO Steve Jobs has steered Apple through bad times and out the other end laughing. Very soon he will no longer be the CEO and chief operating officer Tim Cook will take over at the helm. Tim has a long track record in the industry but from my point of view he is a business man and not the visionary Jobs was. Cook believes the iPhone is ‘years ahead of the competition’ and in his capacity is patrolling the seas for intellectual property pirates. Now point one is that Apple is known for innovation and cutting edge design so if this is the new CEO isn’t he taking his eye off the ball slightly. Creating the trend is intrinsic to Apples future success.

Secondly as this downturn / whatever lexicon is in vogue at present gains momentum personal consumption will dry up. The size of the credit card debt is yet another one of those shoes to drop. While people may have splurged on the iPhone for Christmas its price will be prohibitive in the months going forward.

Lastly where will the new innovation come from and who lead the next wave. The genius of the iPhone was that it took many elements that competitors had and combined them into a nicely designed and more fundamentally easy to use device. If the intention is to just maintain and ease off developing its competitors like RIMM or even those coming from behind like my favourite LG will catch them by surprise.

The modern price conscientious customer is looking for the best product at the best price. Will Apple rise to the future challenges of creating the best products?

The share price may not reach $50 but it is unlikely to revisit $122 anytime soon either. The battle between $80 and $90 will eventually wear the eager for profit investor down and when push comes to shove my bet is that €50 is more plausible that $122.