Loop Capital Predicts New Record Highs for Apple Stock

However, options traders have been leaning put-heavy during the past two weeks

Managing Editor
Jul 6, 2018 at 9:24 AM
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Shares of tech powerhouse Apple Inc. (NASDAQ:AAPL) are set to open fractionally higher after a fresh price-target hike to $210 from $195 at Loop Capital. Analyst Ananda Baruah backed a "buy" rating and said the FAANG stock is "positioned net-positively for 2H 2018," thanks to "ongoing Services momentum," the upcoming launch of a lower-priced iPhone X, and the company's $100 billion buyback plan. Baruah's newly hiked target implies expected upside of 13.3% to Thursday's close at $185.40.

AAPL has been an outperformer on the charts long-term, with the iPhone creator less than a month removed from its early June record peak of $194.20. The stock currently sports a 28.6% year-over-year lead, and recently pulled back to its rising 50-day moving average.

Digging into options, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Apple stock with a 10-day put/call ratio of 0.73, which ranks in the 98th percentile of its annual range. This lofty percentile indicates that puts have been purchased at a faster-than-usual clip relative to calls during the past two weeks.  

Now is an affordable time to buy AAPL options. The stock's Schaeffer's Volatility Index (SVI) checks in at 20%, which registers in the 24th percentile of its annual range. In other words, near-term options are pricing in relatively low volatility expectations at the moment.

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