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Today, we’re opening a new bullish trade on Apple (AAPL). AAPL is breaking out of a “bullish wedge” continuation pattern as analysts are projecting that the company is likely to maintain not only strong iPhone 7 sales numbers but also strong margins on those sales, as the company should be able to continue charging premium prices for its new flagship smartphone. A premium pricing structure has long been the key to AAPL’s success and, with increasing competition in the smartphone market from both the usual suspects — like Samsung (OTCMKTS:SSNLF) and LG — and now the new competitor in the market, Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), analysts are going to be watching closely to see if AAPL can still command high prices.
The company is also looking to take on its competitors by improving its cloud services platforms. AAPL announced today that it will be moving its Apple cloud services teams — Siri, iTunes, Apple Pay, etc. — to the company’s Infinite Loop campus to see if it can find ways to improve and integrate those services.
We expect the stock to climb back above its recent high of $116 and challenge the resistance the stock encountered last November and December at $120 in the run up to the company’s next earnings announcement on Oct. 25, after the market closes.
Buy to open the AAPL November 120 Calls (AAPL161118C00120000).
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