This week marks the fifth anniversary that Tim Cook took over for the late Steve Jobs as CEO of Apple (AAPL) -- and it's also the second time in two and a half months that I'm making a short of Apple my Trade of the Week.
I'm selling naked $105 and $100 October Apple calls Tuesday, as my long-term negative view of the tech giant has been consistent and well-known to long-time subscribers. In fact, I've been suggesting ever since 2012 that Apple will likely have smaller future sales-and-profit growth relative to consensus expectations.
- Fundamental issues. As I noted in my earlier missives referenced above, Apple has long had fundamental problems.
- Technical concerns. Apple has been making mostly lower highs since peaking in May 2015. We've also seen a downturn in Apple's Moving Average Convergence Divergence (MACD) and stochastics over the past two or three sessions.
- The absence of any upside catalysts. The stock faces a "news vacuum" until late September, when Apple plans to release additional details about the iPhone 7.
- A troubled retail sector. Apple and retail-related equities enjoyed a spirited rally recently, but very hot weather in much of America will likely adversely impact third-quarter results. Few analysts have addressed this so far, but I believe they soon will.
- Broad-market issues. We arguably have a vulnerable overall stock market.
- An elevated stock price. Apple has rallied back to nearly $110 a share from around a $90 low in May as the broader market reached new all-time highs. I covered most of my Apple short in the $90s in January, but recently began to build this position back up.
Add it all up and I'm layering in a short of some near-term Apple calls on top of my existing short of the stock itself (which as noted above, I also recently expanded).
A version of this commentary originally appeared on Real Money Pro at 8:19 a.m. on Tuesday, Aug. 23. Click here to learn about this dynamic market information service for active traders.