Apple’s Surprise and Shine Could Deliver an Unexpected Gift for Bulls
Here’s what investors should be watching as the event unfolds.
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With the end of the Labor Day weekend, summer is unofficially over in much of the U.S. Soon, leaves will be falling, footballs will be flying, and the scent of pumpkin spice will fill the air.
Holiday shopping will soon be upon us, and as usual, gifts from Apple (AAPL) will appear beneath the Christmas tree. Or will they?
This year, circumstances are likely to prevent some of those gifts from being ready for the holidays. Depending on the length of the delay, traders focused on Apple may receive an altogether different type of gift.
This Week’s Apple Event
On September 9, Apple is expected to announce the new iPhone 18 Pro and Pro Max models. An event, “Surprise and Shine,” has been scheduled for Wednesday at 10 a.m. Pacific time. We may learn more about the rumored foldable model, believed to be named the iPhone Ultra.
Investors will focus not only on information about new Apple products, but on the timing of the availability of those products. An excessive delay could create a temporary, tradable pullback in the stock.
Anticipating Volatility
Events of this nature often create volatility around Apple shares, and Wednesday should be no exception. If the new iPhones are delayed until spring 2027, as has been rumored, we could see the stock hit an air pocket.
For those who wish to open a position or add to their existing shares of Apple, that decline would be a gift. I’d expect a quick rebound, because Apple isn’t dealing with any company-specific issues. The Cupertino-based tech giant is facing the same cost increases and supply constraints as its competitors.
What Is Apple’s Downside?
If a downside scenario should unfold, at what point should investors look to buy the stock?
Just over two months ago, Apple plunged 6.12% to reach $275. The reason for the decline was due to higher memory and component costs. At the time, Tim Cook, former CEO and current Executive Chairman of Apple’s board of directors, referred to sharply rising costs as a “100-year flood.”
Looking at Apple’s chart, I don’t see a return to the $275 area on the cards. However, I do see a bullish trendline (black line) that originates in early April (point A).
We can extrapolate that bullish line to the $300 area (point B), making that round figure an ideal pickup point for the stock.
That pullback represents a discount of about 6.25% from Friday’s closing price. At the same time, a decline to the $300 area would keep Apple above its 200-day moving average (red), which currently sits near $284.
Bottom Line
It’s often said that Apple should be owned and not traded. I’ll go a step further and say that Apple should be owned, but can also be traded.
I’m already long the stock as a core position, and will consider adding near-the-money November or December calls on a decline to the $300 area.
At the time of publication, Ponsi was long AAPL.
