Despite Apple’s strong quarterly report from April 28, the growth of revenue and dividends, and the extension of the buyback program, the shares have lost almost 20% of the stock value in seven weeks, thereafter turned to correction. Now the shares are trading around the Fibonacci retracements of 38,2%.
The next quarterly report is expected to be on July 28.
Until that day Apple’s upward correction to the Fibonacci retracements of 50% and 61,8% seems to continue.
The day before the release of a new quarterly report, at 9 pm (MSK) on July 27 to be exact, another meeting of the Federal Open Market Committee (FOMC) will be held, where the decision on the interest rate level in the country for the next reporting period will be made. In addition, the FOMC will release a commentary on the monetary policy, where the detailed voting results on the interest rate will be presented; the estimation of the national economy in general and the forecasts for the future will be considered.
Here, traders again get the opportunity of the potential profit from one of the US stock market anomalies - the FOMC “drift” effect. Appliance of this effect on trading Apple’s shares have shown a significant average rate of return of 0,83% per trade 36 hours before the FOMC meetings, and of 0,45% 24 hours before the meetings.
Thus, the following entry-exit options are possible:
1. Buy Apple on July 26 during the opening at 4:30 pm (MSK).
* Сlose out the position on July 27 at 8:59 pm (MSK) or use the target Take Profit order at intervals of 0,8% - 1% from the opening price.
* Set the protective Stop Loss order below the minimum of the previous trading day, i.e., on July 26.
2. Buy Apple, or alternatively add the positions, on July 26 at 9:00 pm (MSK).
* Close out the position on July 27 at 8:59 pm (MSK) as well, or use the target Take Profit order, but at intervals of 0,45% - 0,7% from the opening price.
* Set the protective Stop Loss order below the minimum of the previous trading day as well, i.e., on July 26.
Bear in mind the spread and rules of capital management!
Trading on financial markets is conjugated with a high level of risks that can cause the investment capital loss. The MarketCheese team is not responsible and assumes no liability for a possible loss of your investments.