Apple iPhone ‘halo effect’ set to drive Mac sales higher

The latest consumer PC survey from ChangeWave Research shows two major purchasing shifts simultaneously hitting the marketplace. One is near certain to have a transformational impact on Apple (AAPL).

First, respondents were asked who had either bought a computer in the past 90 days or who planned to buy one in the next 90 to tell us which type of computer (desktop or laptop) and the manufacturer.

No major surprises here, as Apple’s consumer PC sales for the past 90 days have held steady in both desktops (8%; up one point) and laptops (12%; down 1-pt). The most important finding is the stellar year-to-year comparable on Apple laptop sales (+33%).



But when respondents were asked about their planned computer purchases over the next 90 days that the marketplace transformation becomes apparent.

An astonishing 28% of respondents who plan to purchase a laptop in the next 90 days say they’re getting an Apple Mac – a 9-pt increase since our previous survey in March. Another 22% say they’ll buy an Apple desktop – a 4-pt increase since March

What’s the most likely explanation for such large-scale projected gains going forward? First and foremost, all of the advance publicity surrounding the release of the Apple iPhone is concurrently having a ‘halo effect’ on Apple computer sales. But another likely contributor is the coming new release of Apple's highly anticipated Leopard Operating System (OSX) for Macs.

Bottom Line: For those wondering what a ‘Halo Effect’ looks like, take another look at the above Apple chart.

iPhone Makes Waves

The Apple iPhone made its first appearance at Macworld in January 2007 and survey conducted to gauge early interest levels and the potential impact the device would have on the cell phone industry.

Participants were asked how likely is it that you will buy an Apple iPhone for yourself when it becomes available?

Nearly 1-in-10 respondents (9%) said they were likely to buy the new iPhone product when it becomes available -- 3% said they were very likely to purchase one and 6% said they were somewhat likely to do so.

So, Apple iPhone is set to Roil Telecom Industry and there is strong evidence that Apple should exceed its iPhone sales goals for 2008."

The iPhone is likely to have a big impact on smartphone makers such as Nokia (NOK), Motorola (MOT) and Palm (PALM), which will need to respond to the Apple phone's innovative design and features."

The combination mobile phone, Internet device and widescreen iPod media player has been the talk of the tech world since Apple Chief Executive Steve Jobs unveiled it in January, wrote Investor's Business Daily.

Other respondents pointed to the innovative features, such as a 3.5-inch touchscreen display, and Apple's brand reputation as the main selling points.

With the iPhone poised to hit the shelves on June 29 2007, there will be the accompaniment of extremely high levels of consumer excitement.

While no one is certain how the iPhone story will ultimately play out, surveys have shown the huge potential impact on the cell phone industry

Once the product is released, be on the lookout for the results of a Apple July earning announcement.

Insider Trading

If insiders are buying a stock when it's at its 52-week high, "that is a clear sign that you want in."

Sometimes insider buying is "meaningless" and, on its own, an "insufficient" reason to buy a stock. "A lot of times you'll catch insiders buying their stock because they want to give the impression of confidence, to create an illusion that they're doing better than they in fact are,"

However, "it is pretty powerful endorsement when the insiders buy a whole lot of stock," especially when the buying is occurring at the stock's high. "These guys are not going to buy at the high unless they have some unshakeable conviction about their companies." Therefore, insider buying at the high tells investors that there will not be a pullback, "and there's nothing more bullish than that,"

Insider buying, coupled with a heavy short position, also equals a buy, "This is an explosive combination, and more often than not, it means there's going to be a short squeeze," meaning that the shorts will start buying to cover themselves.

10 Rules for Speculating with Options

1) Be patient. Don't invest everything right away. Decide how much you want to risk in options during the next 12 months and spread your purchases over that time frame.

2) Diversify. Don't put all your eggs in one basket. Take at least two or three positions, and try to always own both calls and puts.

3) Minimize your risk. Pay as little as possible for each option. And always be ready to cut your losses.

4) Plan before you play. If you do not have a game plan that tells you when to take profits and when to cut losses, you will have a very difficult time making a profit.

5) Don't be greedy. The downfall of 90% of all options investors is greed. Putting all your money down on a "sure thing" is a certain recipe for disaster.

6) Maximize your leverage. Try to buy options that will increase in value by at least 100%. Buying cheap options is the first step in this strategy.

7) Buy options on high-volatility stocks. You have a limited amount of time to work with. Your best plays are on volatile stocks.

8) In general, buy out-of-the-money options. These options normally have lower prices, and they tend to carry less risk.

9) Buy undervalued options whenever possible.

10) Be patient. This rule bears repeating. Contrary to popular belief, buying speculative options is not a game that requires action every day. Successful options-buying requires patience and selectivity. It is the only way to win this game.

July Bear Call Spread

LVS – Las Vegas Sands Corp.Las Vegas Sands Corp. and its subsidiaries develop and operate hotel, gaming, and resort businesses. It owns the Venetian resort-hotel-casino and the Sands Expo and Convention Center in Las Vegas, Nevada; and The Sands Macao Casino in Macao, the People’s Republic of China (PRC). The company’s casino resorts include hotels, exhibition and conference facilities, casinos, showrooms, shopping malls, spas, restaurants and entertainment facilities, expo and convention centers, and other attractions and amenities. It is also developing the Venetian Macao resort-hotel in Macao, the PRC; the Palazzo resort-hotel-casino in Las Vegas, Nevada; Sands Bethworks in Bethlehem, Pennsylvania; and the Marina Bay Sands in Singapore. The company was founded in 1988 and is headquartered in Las Vegas, Nevada.

Bear call spread:-

Buy July 85 call
Buy July 90 call

Technicals: The stock had a 52-week low of $57.68 set back in July. After the new low, the stock began a multi month rally which resulted in a 52-week high of $109.45. Since that high price, the stock has been steadily trending lower and much of the time beneath its 30-dma. A previous area of support found at the $90 mark failed to hold and ultimately, the stock resumed a trend lower with no safety net in place. The stock trades in the casinos & gaming industry which has been trending lower for several months. The MACD’s are reading flat while the Stochastics are providing a sell signal. Volume over the month of May has substantially increased as prices trend lower. It seems that there is plenty of momentum for prices to continue to slide.