AAPL tape was very interesting yesterday.AAPL was UP $10+ AH ....even pre-market was UP$9.
After the earnings report came out everybody was mesmerized by their BLOWOUT earnings.AAPL target was raised to $140 by famous analyst Gene Munster.
AAPL is a classic story of FA/TA.......
AAPL was OVERBOUGHT in the hoopla of earnings report on wed night & thursday AM.
AAPL margins will be under pressure going forward as per their CFO.
Guess where the margin improvements of AAPL came from...you can thank SNDK and all Flash memory maker who were caught in price war and glut in inventory...AAPL uses Flash memory in several products.........so AAPL kept all the benefit of low Flash memory instead of passing the price decline to customers....a very smart move by AAPL to increase EPS.
Now AAPL CC is predicting margins like this Q2 just reported 35.1% ,Q3 32% and long term trend 27 to 28%..............
Now guess who will be the biggest beneficiary of this increase in margins for AAPL starting this Q..................yes it will be SNDK who also said that back half of Q2 will see improving margins.
On a side topic..........I am a great fan of everything AAPL but have been turned OFF by stock option probes and once SEC & Deptt of Justice clears Jobs I will be back in AAPL @ appropriate technical level.........in plain english when it is OVERSOLD which I expect this to be the case going forward.
Good luck to all in today's trading.
Do your own due diligence
Saleem
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