Two of the most widely used products in technology will report their earnings today. Apple, the pioneer in smart phones and tablets has allowed Facebook to grow to where it is today. Interestingly enough is how Apple, by virtue of its success, has forced Facebook to pay more attention to its mobile platform for advertising revenue.
Apple used to be the most watched and gossiped about earnings report. Now there is barely a rumor about its earnings. The management at Apple probably prefers it this way so that they can work on trying to innovate and not play the equity market game of satisfying analysts and investors.
If AAPL closes today at $527.00:
On average expect it to close between $571.80 and $457.50 by the end of the week. If it goes according to the average, expect a $27.60 move in either direction by the end of the week. Out of the past 14 times it has gone down in price 8 times. If the largest change (up or down) over the past 14 earnings reports is repeated, expect a move more to the tune of $82.10 in either direction.
Now onto Facebook which has a relatively short history of earnings reports.
If FB closes today at $61.50
On average expect it to close between $77.50 and $53.90 by the end of the week. If it goes according to the average, expect a $6.50 move in either direction by the end of the week. Out of the past 7 times it has gained 5 times. If the largest change (up or down) over the past 7 earnings reports is repeated, expect a move more to the tune of $15.30 in either direction.
Both companies have options that appear to be trading with the expectation that the move will be below the average move around earnings. Perhaps the street is bored and doesn’t expect much out of these two companies. Typically the reverse situation, where the options indicate a larger than normal move in the underlying stock price, takes place. If you have a position in either of the two make sure you are not caught sleeping.
Good luck and trade rationally.