How Some Traders Look To Find Possible Swing Trades In A Blue-Chip Stock Like AAPL

Now boasting a $2.5 trillion market cap, a stock like Apple Inc. AAPL would usually be considered too big to generate any exciting swings for a short-term trader. 

While it’s definitely not as volatile or high growth as smaller cap stocks, the tech giant could still have a lot of room for growth, both in terms of recouping losses from the shockwaves of a rocky post-pandemic economic recovery to exploring new markets and tech to help the stock keep growing faster than most other blue-chip stocks.

Keep An Economic Calendar Of Recurring Tradeable Events

While a lot of the market is unpredictable, regulatory compliance and certain recurring events present theoretical trading opportunities that you can generally anticipate well in advance:

  • Earnings releases. This year. Apple’s fourth-quarter earnings release is slated for Oct. 27, for example. In 2023, it will release quarterly earnings reports in January, April, July and October.
  • Product and software launches
  • Ex-dividend dates
  • Apple events. The company holds three to four events each year — like the Worldwide Developers Conference this past June — showcasing the tech and software it’s working on and it often generates a lot of buzz that can translate into tradeable swings.

Bear in mind that just because these events happen at predictable times doesn’t mean they’ll unfold the same way each time. While Apple beat analysts’ expectations when it reported $83 billion in revenue last quarter, that doesn’t mean it’s going to report record revenue next quarter. 

This calendar is meant to give you a way to prepare for upcoming opportunities in advance. From there, check analyst predictions, news and financial statements to see whether the relative optimism or pessimism leading up to the event makes sense — then take the time to plan your trades. 

Watch For Upcoming Tradeable News From Apple

While blue-chip stocks like Apple are favored by long-term investors, they typically aren’t the top choice for swing and day traders because that same financial stability and consistency that long-term investors love mean there are relatively few swings in either direction that are large enough to make any real profit on as a short-term trader.

Even so, the increased volatility the market has weathered this year has made these stocks a little more tradeable than usual. Apple, in particular, is one of the unique stocks that is considered both a blue chip and a growth stock because the tech sector it is in is still a fast-growing sector. 

With that in mind, some possible swings in AAPL that traders can expect in the coming months include:

  • A fall release of iPhone 14 and multiple other new products could generate interest in the stock as well as increases in revenue that could push the stock up.
  • The postponed release of augmented reality glasses and headset, which was originally slated for the end of this year, could cause some negative sentiment that pushes the stock down.
  • A cash-heavy Apple might be looking to increase acquisition activity, which could push the stock up.
  • Antitrust lawsuits and investigations across Europe, Asia and the United States could cause negative sentiment, while unfavorable rulings and stricter regulations could hurt revenue and push the stock down.

While there’s still a lot of room for growth in a company that’s just beginning to tap into new segments like financial services and augmented reality, competition is fierce, and a crackdown on anti-competitive tactics could make it even fiercer. 

Amazon.com Inc. AMZN, Meta Platforms Inc. META and Alphabet Inc. GOOGL are all developing products and services that compete directly with many of the company’s best-performing segments. While it may not be the first in the new markets its exploring, Apple may still has a good chance of maintaining its dominance by being innovative enough to put out products that continue to redefine the game. 

Use A Single-Stock ETF To Potentially Amplify Daily Returns

As part of its plan to roll out about two dozen single-stock exchange-traded funds (ETFs), Direxion is offering a Daily AAPL Bull 1.5X Shares (AAPU) and Daily AAPL Bear 1X Shares (AAPD) for traders who want to leverage their AAPL trades. 

While leveraged ETFs traditionally track entire indexes or themes — containing dozens or hundreds of tickers in a single ETF — Direxion’s new bull and bear ETFs focused specifically on AAPL let traders enjoy the benefits of a leveraged ETF on their single stock trades.

AAPU, the bull ETF, for example, amplifies each bullish trade by 150%. While that means a loss will be amplified as much as any gains, this helps make the most of each trade for a stock that might otherwise be too stable to offer the large swings short term that traders look for. 

Meanwhile, AAPD, the bear ETF, lets you short the stock without selling your long-term position, which would create a taxable event. It can also be a useful way to hedge some of the intraday losses that those long-term positions might experience. Because it’s not leveraged like the bull ETF, your risk won’t be magnified any more than it is — and because short positions generally carry more risk, that lack of leverage is a way to limit your exposure. 

Just keep in mind that these tools are designed for short-term (typically intraday) trades. For investors looking to buy and hold, it’s often better to invest directly in AAPL rather than a leveraged ETF.

 

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Featured photo by Saad Chaudhry on Unsplash

 

Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. Investors could lose the full principal value of their investment in a single day. The use of leverage by a Fund increases the risk to the Fund. The Direxion Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.

 

Important Information Regarding AAPU The Direxion Daily AAPL Bull 1.5X Shares (AAPU) seeks 150% daily leveraged investment results and thus will have an increase of volatility relative to the underlying AAPL performance itself. As a result, the fund may be riskier than alternatives that do not use leverage because the fund’s objective is to magnify the daily performance of the common shares of Apple Inc. AAPL. The return for investors that invest for periods longer or shorter than a trading day should not be expected to be 150% of the performance of AAPL for the period. The return of the fund for a period longer than a trading day will be the result of each trading day’s compounded return over the period, which will very likely differ from 150% of the return of AAPL for that period. Longer holding periods, higher volatility of AAPL and leverage increase the impact of compounding on an investor’s returns. During periods of higher AAPL volatility, the volatility of AAPL may affect the fund’s performance.

 

Important Information Regarding AAPD The Direxion Daily AAPL Bear 1X Shares (AAPD) seeks daily inverse investment results and is very different from most other exchange‐traded funds. The pursuit of daily inverse investment goals means that the return of the fund for a period longer than a full trading day may have no resemblance to ‐100% of the return of the common shares of Apple Inc. AAPL This means that the return of the fund for a period longer than a trading day will be the result of each single day’s compounded return over the period, which will very likely differ from ‐100% of the return of AAPL for that period. Longer holding periods and higher volatility of AAPL increase the impact of compounding on an investor’s returns. During periods of higher volatility, the volatility of AAPL may affect the fund’s return as much as, or more than, the return of AAPL. Further, the return for investors that invest for periods longer or shorter than a trading day should not be expected to be ‐100% of the performance of AAPL for the period.

 

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866‐476‐7523 or visit our website at www.direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

 

Technology Sector Risk — The market prices of technology related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. Technology securities may be affected by intense competition, obsolescence of existing technology, general economic conditions and government regulation and may have limited product lines, markets, financial resources or personnel. Technology companies may experience dramatic and often unpredictable changes in growth rates and competition for qualified personnel. These companies are also heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely impact a company’s profitability.

 

APPL Risk – In addition to the risks associated with companies in the technology sector, Apple Inc. faces risks related to the impacts from the COVID‐19 pandemic; managing the frequent introductions and transitions of products and services; the outsourced manufacturing and logistical services provided by partners, many of which are located outside of the Issuer‐specific attributes may cause an investment held by the Fund to be more volatile than the market generally. The value of an individual security or particular type of security may be more volatile than the market as a whole and may perform differently from the value of the market as a whole.

 

Direxion Shares Risks – An investment in each Fund involves risk, including the possible loss of principal. Each Fund is non‐diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. Risks of the Funds include Effects of Compounding and Market Volatility Risk, Leverage Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra‐Day Investment Risk, Daily Correlation/Tracking Risk, Apple, Inc. Investing Risk, Single Security Risk, Market Risk, Indirect Investment Risk, Trading Halt Risk, and risks specific to the technology sector. Additional risks include, for the Direxion Daily AAPL Bear 1X Shares, risks related to Shorting and Cash Transactions. Please see the summary and full prospectuses for a more complete description of these and other risks of the Funds.

Distributor: Foreside Fund Services, LLC.

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