Predicting Stock Buying During Tuesday’s Apple Event

Jonas Elmerraji, CMT

Apple (AAPL) -Get Report is set to show off its newest products Tuesday, and the rumor sites are in full swing trying to predict what’s on deck for the event.

The big question continues to be whether we’ll see the iPhone 12 – or if phone buyers will need to wait another month.

Predicting Apple’s next move is hard. But, surprisingly, predicting how investors will react to the event isn’t.

Looking at data from Robinhood’s API* stretching back to 2018, we can peer into how retail traders buy or sell shares of Apple in anticipation of, or reaction to, each Apple event that’s happened in that stretch.

And the data is pretty clear cut – retail investors buy Apple on event days:

Robinhood_AAPL

Without fail, traders on the Robinhood platform increased their stakes in Apple during event days – sometimes significantly.

On average, AAPL retail positions on Robinhood increased by almost a full percentage point on event days. That’s not an insignificant different for a stock as big as AAPL.

In fact, it’s about 7x higher than the average daily change in positions in Apple on a typical day during that timeframe.

If we take Robinhood’s data as representative of retail investors in general (which is a stretch, but not totally crazy), then the data suggest that buyers are going to be flooding into shares of Apple on Tuesday starting around 10am Eastern.

What that means for Apple’s stock price has been a little less cut and dry.

While retail buying has been consistent, Apple’s price reaction has been more random. That suggests other market participants may use events as an opportunity to take advantage of the liquidity boost and sell.

If that’s the case, it means that a bullish signal in Apple event days is being masked by that activity.

Unfortunately, we won’t get to see how things play out this year – Robinhood took the popularity endpoint of their public API offline last month. Even so, the historical data provide an interesting peek behind the curtain at what’s actually happening among retail traders during Apple media event days. 

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