At 1 p.m. Eastern time today, Apple (AAPL) will begin an event that will set the tone for its stock for the at least the next few weeks when they unveil this year’s new product suite. As you might expect for the iPhone’s tenth anniversary, it is looking like this product launch will be a biggie, with multiple new phones and other products on display.
As always at this time, the questions that Apple stockholders and those that trade the stock are asking is, what will AAPL do in response to the announcement and what should my investing strategy be?
I addressed that question to some extent a couple of weeks ago, in an article written once the launch event date was known. That piece, however, was concerned mainly with expectations for the stock in the run-up to today. I said then that although conventional wisdom held that AAPL would climb as the date approached and the rumors and anticipation grew, this time would be different.
Doubts about the viability of a thousand-dollar price tag and a general feeling that tweaking things every year or so was growing old with consumers, I maintained, would ensure that AAPL lost ground in the immediate run-up to today. So far, so good!
AAPL shed around five percent in a consistent week of down days up until yesterday, a period during which the S&P 500 was mixed with no major move evident, making that part of the prediction accurate. The second part of that article suggested that once the launch was actually here the prospect of an iPhone with a whole bunch of new bells and whistles would give the stock a boost.
In the light of what we have learned since, I still believe that to be the case, but I would wait a little before wading into the stock.
The overall skepticism that drove the stock down over the last week is still out there, and the small amount of buying that we have seen yesterday and early this morning make it far more likely that immediately following the release later today, AAPL drops. Assuming that we get confirmation of a thousand-dollar price point for one of the phones, that will trigger some “I told you so” selling and some profit taking from the speculative buyers of the last couple of days.
I would therefore wait rather than buy early today or immediately following the announcements, but I would nonetheless still be a buyer.
The reason is simple: history. Apple is expected to show off a high-end new phone that will be known as the iPhone X as well as the iPhone 8 and 8 plus. In addition, rumor has it that we will see an update to the Apple watch and a new generation, 4K Apple TV. What history shows us is that Wall Street analysts will translate all that new stuff into increased sales projections, regardless of what the cynics say about them, and that those analysts will be right. We, as consumers, still can’t resist shiny new Apple stuff.
If the scenario laid out above is what transpires, then the dip that follows the launch event will be a tremendous buying opportunity. If not, then you may have missed a small amount by waiting, but there will still be plenty of upside left. Either way, watching the launch itself and allowing the stock to settle where it may once the dust dies down is by far the best strategy for the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
