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Timing Your Apple Entry Points

The reason why I chuckled is because his own estimate was raised from 28.2 million units to 29.5 million. Does Wu realize what would happen if Apple hit his lowball number?

I agree iPhone units could come in between 29 million and 33 million units but when a stock has risen $200 in the quarter there is no appetite to merely meet expectations or to come in below expectations, as Apple-defender Wu suggests.

For the stock to rocket higher in the short run iPhone sales need to be over 35 million.

Why are we not completely out of Apple in the portfolio? Because the over-35 million is possible. But the fact remains that we just don't know. Apple momentum has increased in downside volatility which opens the door to a significant sell-the-news reaction.

Portfolio cash can turn into real wealth if re-invested after Apple dips below $550. We'll be buying a new core position in October 2012 calls should Apple sell off following the report. Owning the October calls at a favorable entry point in advance of the iPhone 5 release is as good as it gets.

At the time of publication, the author was long AAPL.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Jason Schwarz is an option strategist for Lone Peak Asset Management in Westlake Village, Calif. He is also the founder of the popular investment newsletter available at www.economictiming.com. Over the past few years, Schwarz has gained acclaim for his market calls on the price of oil, Bank of America, Apple, E*Trade, and his precision investing in S&P 500 option LEAPS. His book, The Alpha Hunter, is set to be released by McGraw Hill in December 2009.

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