Relief over weaker-than-expected restrictions on Chinese investments are also a boon
Shares of Apple Inc. (NASDAQ:AAPL) are up 1.2% at $186.70 in early trading, after Barclays hiked its price target on the FAANG stock to $175 from $161 last night, saying the company stands to benefit from a weaker U.S. dollar, as well as carrier promotions in both the U.S. and China. The bull note came just ahead of today's announcement from the Trump administration that the Committee on Foreign Investment in the United States (CFIUS) will oversee any sensitive domestic technology purchases by foreign companies -- and likely create weaker-than-expected restrictions in Chinese investments in U.S. tech.
Looking at the charts, Apple stock has been trending lower in recent weeks, already down almost 4% from its June 7 record high of $194.20. The tech name is still up 29% year-over-year, however, and is now trading within one standard deviation of its 80-day moving average -- historically, a buy signal for AAPL stock.
Options traders have been bracing for more downside, though, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing AAPL with a 10-day put/call volume ratio of 0.60, ranking in the 74th percentile of its annual range. While this shows that more calls than puts have been bought to open over the past two weeks, the stock's high percentile means that rate of put buying relative to calls has been at a faster than usual clip.
Given the stock's longer-term trend, some of this put buying could be of the protective kind. Regardless, Apple's short-term options are attractively priced at the moment, from a volatility perspective. AAPL sports a Schaeffer's Volatility Index (SVI) of 19%, which ranks in the 22nd percentile of its annual range.