10:30pm (EST) Talk about a product(s) that sells itself. Every year, quarter after quarter, Apple (AAPL, $151.51, down $1.40) seems to impress us and Wall Street with a new gadget or an improved model on an already existing one. This quarter it was Apple’s new iPhone although it didn’t make its debut until June. Yet, Apple still sold 5 million units. Incredible. The sales figure is even more impressive when you consider Apple cut prices in half on the older 3G models to $99. The Apple 3GS model was only on the books for 30 days and Apple would have crushed Wall Street’s numbers without it. I can see all of the analysts rushing in to upgrade next quarter’s numbers. For you number geeks, Apple reported profits of $1.2 billion, or $1.35 a share, versus $1.1 billion, or $1.19 last year. Sales came in at $8.3 billion, up from $7.5 billion. For the upcoming quarter, Apple forecast earnings of $1.18-$1.23 on revenue of $8.7-$8.9 billion. Talk about sandbagging…expect Apple to blow by them as well with the back-to-school season right around the quarter. In after-hours trading, the stock was up $7 to $158+. When I left you at 1pm today, I said the bulls could be resting for the afternoon push and that is just what we got. With Apple’s numbers and the way the stock is acting in after-hours, the bulls will be running again on Wednesday. If that is the case, then we should see continued strength in our IBM (IBM, $117.04, up $0.60) and Cisco Systems (CSCO, $21.59, up $0.44) trades. For those of you who just joined us this week, it is too late to participate in these trades but the results will floor you. On July 14th and 16th I told readers to jump on some IBM calls as a way to play an expected surge in the stock. Some of our subscribers closed out their IBM July 105 calls for profits up to 450%. I also profiled the August 105 calls (IBMHA, $12.00, up $0.30) at $3.40 and the August 115 calls (IBMHC, $3.70, up $0.20) at $1.05. Both call options have now returned 250%. I bring this up not to make you newbies feel like you just missed out on some really good trades but because I don’t want anyone STARTING positions on any of these options. We have a lot of new faces this week so I want to be clear on what is going on. We have a stop of $10.00-$10.50 for the 105’s. And for the 115’s we have a stop of $2.25-$2.50. Bump those up to $11 and $3 if IBM continues higher on Wednesday. For Cisco, I profiled the October 20 calls (CYQJD, $2.30, up $0.30) on June 2nd at $1.50. This position lost as much as 50% but I kept telling everyone to hang in there…Cisco is a $25 stock. I wish I would have told you do “double up” when these calls were at 75 cents a few weeks ago but I don’t trade that way. We don’t need Cisco to go to $25 to be profitable with this position as you can see. However, I will say this…these call options will be worth at least $5 if Cisco is at $25 by October 16th. At current levels, the position is up 50%. Set stops at $2.00 to protect profits. Both stocks were higher in extended trading and with the Apple news we should be able to ride the positions higher while moving our stops along the way. BTW, Chipotle Mexican Grill (CMG, $88.70, up $0.40) was back at $90 in after-hours and the August 95 calls (CMGHS, $2.30, down $0.05) rebounded from the $2.00 bottom we saw at 1:00pm. The company reports after the bell on Wednesday… Rick@MomentumOptionsTrading.com]]>
