Apple Inc (NASDAQ:AAPL) stock saw a massive surge in short interest ahead of the iPhone launch.
It looks like investors are betting on shares of Cupertino based tech giant Apple Inc (NASDAQ:AAPL) to slide lower after the iPhone launch. The short interest in Apple stock surged by a massive 23% in the latest reported period. The number of shorted shares jumped by almost 9 million from 39.12 million to 48.11 million shares. Days to cover currently stands at two days, indicating a very little chance of a short squeeze.
Apple yesterday launched its much awaited $1000 iPhone X at the Steve Jobs theater in its new campus. It has a 1 million-to-one contrast ratio on its 5.8-inch OLED display. Users can unlock the phone using Face ID, which identifies users with a one-in-a-million chance of a mistake. However, the Face ID feature faced glitches during yesterday's launch. Pre-orders start on Oct. 27 and the phone will be available beginning Nov. 3, the company said.
However, Apple stock continued its not so proud tradition of declining on the day of iPhone announcement. As we had discussed in our previous post, Apple stock has declined 75% of the time on the day of the iPhone launch. On the bright side though, the stock has eked out a gain on the next day of the launch.
Apple stock has rallied by over 38% this year on the anticipation of an iPhone super cycle. However, some analysts are expecting Apple stock to fall in the months ahead. Gene Munster, a managing partner at Loop Ventures and a well-known Apple analyst expects the stock to fall by 8%-10% in the next few months. Many analysts also found yesterday's launch a bit underwhelming. There are also concerns about the delay in the shipment. Apple will only begin shipping the latest iPhone in November, well after its current fiscal year closes at the end of September. Usually, new iPhones are available for sale in September, providing a boost at the end of its fiscal year.
The delay in the sales has raised some concern around this quarters earnings. However, the company clarified that it had not included iPhone X sales in its Q4 guidance. In a statement, Apple said: "When we issued guidance for Q4 in July, we anticipated that the iPhone X would begin shipping in fiscal Q1." There were reports prior to yesterday's launch which hinted at the delay in iPhone shipment due to shortages of certain parts.
Apple stock is part of our top stocks to buy from the tech sector which have outperformed the Nasdaq Composite by over 150%.
Short interest in Advanced Micro Devices, Inc. (NASDAQ:AMD) inches higher.
Advanced Micro Devices, Inc (NASDAQ:AMD) continued to remain one of the most shorted stock on the Nasdaq (by volume of shares). Short interest in AMD inched slightly higher as the sentiment around the stock continued to be bearish. Short interest increased by 1%, with the number of shares shorted jumping from 147.7 million to 149 million making up 16% of the company's float, a sizeable chunk.
AMD stock has not lived up to expectations this year, underperforming the Nasdaq Composite in the year to date period. AMD stock is down over 10% since its second quarter earnings. There is some positive news emerging for the company. There are reports of AMD gaining market share over Intel (NASDAQ:INTC) in some of the major markets. AMD stock is currently facing resistance from the 100-day moving average.
BlackBerry Ltd (NASDAQ:BBRY) stock: Possibility of a short squeeze?
Short interest in BlackBerry Ltd (NASDAQ:BBRY) stock is up again after declining for two consecutive fortnights. Short interest jumped by 9.9% in the latest reporting period. The number of shorted shares increased by over 3.8 million, from 38.54 million to 42.36 million, representing 8.1% of the company's total float. Days to cover increased marginally to 12 days, which is quite high. A strong up move in BlackBerry stock could force shorts to take cover, leading to a short squeeze and sending BlackBerry stock even higher.
BlackBerry stock has been gaining momentum in the last couple of weeks. The stock is up over 8% since August 21st. However, the stock is facing resistance from its 50-day moving average. BlackBerry stock had rallied more than 65% this year, before ceding almost half of its gains after the disappointing second quarter earnings.
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