Apple iPhone on Verizon network coming this February but what does the market think today?

It Begins… 1/11/11 11:11 (close enough) Apple on Verizon. Unless you are living in cave, this is not a surprise to anyone.

I loved COO of Verizon Lowell McAdam comments “Proof of an old adage of the press: If the press writes something long enough, and often enough, it comes true.” And the press has speculated and written this for years. While there are some limitations on the Verizon network, it’s an exciting day for a lot of people who either cannot get (or just hate) AT&T service.

The question now is “Is it too little, too late for Apple?” Apple’s delay in this inevitable move, allowed Android to gain a significant stronghold in the smart phone market. Are people going trash those new Androids for a new iPhone with fewer features and capabilities? Time will tell. Ultimately, this is going to be great news from Apple and Verizon. It can only mean more sales.

So, if this is good news why is Apple not moving more bullish today? At the time of this writing (12:45 ET), AAPL is down $1.13. And if I had to guess, I would expect it to go lower. I believe that it’s a combination of two phenomena:

1. “It was already priced in.” The long anticipated announcement and the leaks meant that a lot of savvy traders have already factored this into their pricing decision.
2. “Buy the rumor; sell the news.” Apple often demonstrates this behavior. It rallies into an announcement and then falls after the announcement. I am not sure if it’s because of disappointment from the rumor not being as big as everyone thought; or just plain profit taking; or some other cause. All I know is that it happens. And it happens with AAPL often.

My long-term sentiment is bullish on AAPL. I expect that they stock will continue its skyward trend. But, it could pull back here before moving up.

There are fresh rumors of an iPhone 5, which is not officially announced but expected around June. There’s also a rumor that the iPad 2 will be announced as early as February 2 (http://kevinrose.com/blogg/2011/1/7/rumor-ipad-2-is-coming-soon.html).

What else does Apple have up their sleeve? We’ll have to wait and see. But, I don’t think they are going to be short of innovation and surprises. That’s good news for people who are trading this bullish.

And don’t forget that Apple has earnings on January 18, after the close.

Eric Hale
OptionsANIMAL Instructor

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