Learn the trade here. Make it on tradeMONSTER

Options Trading News

April 10, 2013  Wed 8:16 AM CT

AAPL: SEE CHART GET CHAIN FIND STRATEGIES
All that some of these tech stocks need to do is just come within a hair of what they are expected to do, and they could rally. That's what I saw yesterday when many of them lifted off, ostensibly because China might be getting stronger.

You know what makes me confident that that could be the case? Take a look at Oracle. People sold that stock down to $31 and change when it reported, and ever since then it has been a slow and steady climb higher.

Now today, many people were buying nascent Oracles, stocks where the estimates had been cut already and people are pretty sure that the numbers will be ugly when we see them: Intel, Microsoft, and Apple.

TheStreet.com logoWhen you buy stocks ahead of quarters where the numbers have already been slashed, then you know what you are getting into, and I can see people saying, "Look, at 10x earnings, I think I can take the risk that things will be OK even if they just miss the number but talk about how they will make future numbers."

I don't think that's a wrong calculation. Now you can't get away with that if you think that the United States and China are getting weaker, but you can if you say that inventories are really lean and that the second half shows promise and leave it at that.

Throughout yesterday's session I searched for reasons that tech could not only go up--that was China--but stay up. And that's because expectations have been slashed already and people think, rightly or wrongly, that that immunizes the stocks.

I think it can immunize them, but if they run for several days, the immunization will wear off, and the attempt-to-bottom process will start all over again.
 
Disclosures: Cramer's charitable trust is long AAPL and ORCL.
Share this article with your friends


Related Stories

AAPL

Cramer: Meeting unmet needs

September 12, 2014

Sometimes a stock goes higher because the company it represents is solving unmet needs. And that leads to a discussion about Apple.

AAPL

Cramer: Second IPO flood on way

September 8, 2014

AAPL

Cramer: Own Apple, don't trade it

September 4, 2014

They are doing it again. The analysts, the bloggers, the Apple-ites, they are drumming up excitement for the Sept. 9 meeting that is almost impossible to surpass.

AAPL

How to get the hedge you want

September 1, 2014

When traders look for protection, how much to hedge is a key question. That is one of the reasons that we introduced our Hedge Zone system.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Free Webinars

Swing Trading w/ Jon Najarian and Ron Ianieri

Education & Strategy

Make your rules, and stick by them!

New traders often act on the recommendations of others or on gut feel. But that is a quick way to...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER