The Gilmo Report

May 1, 2019

May 1, 2019

Earnings season continues to produce a mix of price gaps to the upside and the downside. The latest gap-up move in a leading stock, Apple (AAPL), helped fuel the indexes mostly to higher highs overnight given that it is a leading component of the Big Three major market indexes that are the Dow, the S&P 500, and the NASDAQ Composite.

AAPL’s move constituted a buyable gap-up at the open this morning. Interestingly, the move appeared to be fueled mostly by news of a 5% increase in the stock dividend and an additional $75 billion of intended stock buy backs. The fundamentals themselves left much to be desired, with the company posting a -10% earnings contraction on a -5% sales contraction.

If one had bought this at the open, which is a best-case scenario, in the interests of playing a BGU in the stock, one would not have realized any significant upside if they held the stock throughout the entire day. AAPL opened at 209.88, hit a peak of 215.31, and closed at 210.52 as sellers swarmed the stock into the close.

 

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