Is it time to short Apple?

Last year around this time (July 21st 2015), the price of Apple dropped $12 from $132 after the earnings announcement, which subsequently set off a move all the way down to $102.

This year’s earnings announcement will take place July 26th 2016.

All eyes are on Apple to see if it can meet expectations after ending its 13-year record revenue streak last quarter.

You can see on the chart that we are coming up to technical resistance around the $100 mark now.

I think shorting it anywhere close to $100 is a great entry point with a profit target of around the $90 mark. (This isn’t to be seen as investment advice, it’s just my opinion!)

The example below illustrates the Risk/Reward potential:

Sell 2000 shares @ $100 and close position @ $90

$10 profit x 2000 shares = $20000

Money required for margin in the account for this trade = $10,000

Value per point = $20

Stop loss: 103.70 (risk $3.70 x 2000 shares = $7400)

Risk to Reward 7400/20000 = 1 : 2.7

Until September, I see little upside risk until they’ll announce their new iPhone.