TRADING APPLE

 TECHNICALS
APPLE Technicals Behavior -  Apple Shares Behavior Before and after the September Event ?   
 August 30 ( From TradingView, Nasdaq.com, Stockcharts, MarketWatch  )


August 30: Apple Shares Behavior Before the September Event and after ?


This is a research based on the historical behavior prior and after of the
​release of Apple September Event ( SE ) that will be presented by Apple on
​September 9.

​​As usual, when Apple announce the SE date, market start to speculate on
​potential new products well inadvance. Last year it was:
​Apple Unveils Apple Watch—Apple’s Most Personal Device Ever
Apple Announces iPhone 6 & iPhone 6 Plus—The Biggest Advancements in iPhone History
Apple Announces Apple Pay
Apple Announces iOS 8 Available September 17

But this year ​expectations are ​average, few have a clue what Apple can announce.​ ​​ Could it be as new products the iCar or.... Apple Fever again...

And especially this year with the Market Turmoil on Emerging Markets and China, it is harder to predict the market behavior than the usual price pattern.​​ Take note thta the  Shanghai Stock Exchange is closed the 3 and 4 of September 2015.

What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Price 5 Trading Days​​​​ before and 5 Trading ​Days after the SE dates compare to the SP500 Index in a Relative Daily Performance of the past 5 years​
​ ( T=0 on the chart below - bottom scale is September 9 )
2) Applying a normalize level in each case at SE Dates with a level at 100 in ​each case​​
​( See chart below - left scale )​.

                                      Chart of Relative Daily Performance Index in % of Apple Shares vs SP500                                                                  Normalize at 100 on September Event Days ( T=0 )
                                                                            ( 2010 to 2014 )​



​​

























​​​​​​​​​​​​​​​

​So what I found :
1) Relative Price on average of the past 5 years before the event is falling from the 5 trading session to the 2 Trading Days prior of the event on average. Average return from T-5 to T-2 was -0.98% ( Average Price 5 years in orange - chart above )
​2) Relative Price on average of the past 5 years before the event is then rising from the 2 trading session to the Event a T=0 Trading Days prior of the event on average. Average return from T-4 to T=0 was +1.02% ( Average Price 5 years in orange - chart above )
​​3) Lowest Closing Price on Average of the past 5 years have been 2 Trading Days prior to September Event:​
So in our case is ​September 4. Average return from T-2 to t=0 was +1.02%.
4) ​Peak price is the highest at T-5 prior to the event: in our case, will be September 1 2015.
​​​​Average return from T-5 to t=0 was -0.58%.
5) ​From the event plus 1 trading session, Relative Price does not move much: ( Taking Closing price as a Proxy of the past 5 years ) is ​( in our case September 10 2015 ): So from a normalize 100.0 at event Date, it rise to 100.08 1 day after the event. So relative price rose on average of the previous 5 Years 1 day after the event by 0.08%.
​6) ​Relative Peak Price After the Event: From the event plus 5 trading session, Relative Price Gap Up and reach Peak Price: ( Taking Closing price as a Proxy of the past 5 years ) is ​( in our case September 16 2015 ): So from a normalize 100.0 at event Date, it spike to 101.26 5 days after the event. So Relative price rose on average of the previous 5 Years 5 days after the event by 1.26%.


So what we found ( IF history repeat itself for sure ):
1) Apple Shares is in a grinding process from T-2 to T+5 for the SE event.
2) Apple Shares perform mostly like the SP500 before SE
3) Relative Bottom price is reached at T-2 prior SE and Relative Price is peaked after SE is at the T+5.​

​​​
​​​​​​​​​​​​​
​​​​​What have changed​ compare to the last 5 events :
1) ​Market Turmoil on Emerging Markets and China continue to be heavy on Apple Shares.
2) Expectations are average of the past 5 years because few see new products annoucement.
​​3) ​Since the Dow Jones Inclusion in March 2015, Apple Shares Behavior have been different:
​Institutionals Participants will bring more Volatility in Apple Shares Prices.




​​Now back to Seasonals to see it it help or not the price action of Apple Shares in September.​

​​The Month of September is also very special in terms of Seasonalities as the whole Market Trend is in the Range Trade Pattern til the 12 to peak around the 18 to finally close slightly above the beginning of the month ​for the Mighty SP500 ​Index. SO Choppy Technical Pattern it is for the month of September.

See the chart below.























​​​​​​​​


​​

​​​​​​​​​​​​​​​​​

​​​​​​​​​

​​

​​​​​​​​​​​



​​

​​


April 2013
July 2013
October 2013
January 2014
Daily Chart - Seasonalities - Daily Performance in % of SP500 Index - Average of the past 5 years
 September 1st pegged at 100


.( See chart below )
For Apple, this is quite the same but bigger amplitude as shown by the chart below.
Daily Chart - Seasonalities - Daily Performance Index in % of Apple Shares - Average of the past 5 years
September 1st pegged at 100 ​


​​( See chart below )
But in fact, what it is important for us to know is the Relative Outperformance of Apple Shares that historically start on August 11 til August 23 according to the past 5 years as shown by the chart below.
Daily Chart - Seasonalities - Relative Daily Performance Index in % of Apple Shares vs SP500 Index
​- Average of the past 5 years - September 1st pegged at 100 ​

( See chart below )
So my message here is that ​​in terms of Relative Performance, the month of Septmeber is average for Apple Shares Historically speaking from beginning of the month to the end.

BUT from the 16th to the 23rd of September, we had on average for the past 5 years an outperformance of Apple Shares​​ from 99.49 to 104.5 on a Relative basis or +5.03% IF history repeat itself for sure...


Relative Volatility closed at 1.52 on August 28, well below its 200 DMA at 1.90 and pure Volatility closed at ​39.49 last Friday, level well above the 200 DMA at 28.8%. Volatility trend til September Event Release is slightly  by +0.3% higher.

What I am telling you is that Volatilty is expensive BUT Relative Volatility seems to be on the cheap side considering the Seasonality in September but mainly the Emerging Markets Turmoil...

​​
​The Weekly September 4 113 Straddle ( Long Call and Long Put ) closed on August 28 at $4.14 and

I will follow that straddle this week...​​


The best technical set up for me is to stay above the $109.63 level til the September Event and test the 20 DMA now at $113.42. Knowing that seasonals are weak til September 12​ and Volatility will prevail, plenty of opportunities will arise in September... Month end also will be a huge catalyst in terms of Volatility...

IF history repeat itself for sure, the best risk reward trade set up in term of Relative Performance should be from mid-September to the 23rd....

​​Stay tuned as I will update you in the Daily as usual for specific trading levels on Apple Shares...

END.​​