Apple is now Dan Niles’ largest short position: here’s why

on Sep 14, 2021
  • Dan Niles explains why Apple is now his largest short position on CNBC's "Squawk Box".
  • The Satori Fund founder expects a 10% to 20% market correction before the end of the year.
  • Shares of the American technology giant are up close to 20% on a year-to-date basis.

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Shares of Apple Inc (NASDAQ: AAPL) are up close to 20% year-to-date, but Satori Fund’s Dan Niles warns the momentum might not sustain.

Only hours ahead of Apple’s annual event in which the tech giant is expected to launch the new iPhone 13, Niles disclosed that AAPL was now his largest short position.

Niles’ remarks on CNBC’s “Squawk Box”

Niles cited Apple’s historic trading pattern as one of the reasons for his bold call. On CNBC’s “Squawk Box”, he said:

“In the month leading up to a new product launch, Apple stock is up about 76% of the time. But on the day of the product launch, its shares are down about 76% of the time and struggle for the next two weeks.”

Other reasons why Niles shorted Apple Inc

Apple is also expected to take a hit to its App Store revenue after losing the court battle to Epic Games on a crucial front last week.

On top of that, Niles added, the tech giant saw a sharp increase in demand for its products amidst the pandemic. Now that the restrictions are easing, however, Apple might see a similar reverse that “we saw in streaming and eCommerce”.

Niles expects a 10% to 20% market correction

Niles attributes much of the market rally this year to the stimulus and expects a significant correction once it’s removed.

“If the U.S. Fed tapers later this year, it’ll start removing the stimulus we’ve jammed into the market. So, we’re trying to have as many or more shorts than we have longs at this point because we believe there’s a 10% to 20% correction before the end of this year.”


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