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Apple's Friday Surprise

Once again the traders are keeping a close eye on Apple after the company announced a surprise press conference Friday to discuss growing concerns about reception problems with the new iPhone 4.

As you probably know, the Apple faithful lined up around the block to buy the latest smartphone when it was released on June 24th. It was so popular, Apple sold 1.7 million gadgets in only the first three days.

However, the device that generated huge public interest has also generated huge PR concerns. The iPhone 4 has a serious design flaw and if you hold it a certain way it drops your call.

When the problem first came to light it almost seemed like a joke – a new phone that can’t make calls.

However the situation took a very serious turn last week after Consumer Reports said it could not recommend the smartphone because of the situation. (Click here to read iPhone 4 Design Flaw Puts Apple Stock On Hold?) On the news, shares that had already been weak tumbled sharply.

In what’s largely considered a critical attempt to get the situation under control, Apple said it would hold a press conference on Friday. Since the surprise news hit, the Internet has been swirling with speculation as to what they would say.

ComputerWorld suggests Apple will give away a $29 bumper case for free – (putting the phone in the case essentially fixes the problem). Others speculate Apple will announce some kind of fix.

Yet others suggest Apple will issues a recall – a move that most Wall Street analysts say is unlikely. If they do, according to Bernstein it will cost the company $1.5 billion.

What’s the trade?

Apple shares turned higher late day, says Jon Najarian. The action makes me bullish. (It's worth noting that a sharply different outlook than Najarian had on the Halftime Report.)

Apple is smart, says Patty Edwards on the Halftime Report. I expect they have a solution to the problem or they wouldn’t have the press conference. I think after the event the stock goes higher.

If you’re been waiting for a pull back, I’d close my eyes and buy the stock around $230 and hope for better days, says Guy Adami.




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Trader disclosure: On July 15, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BP), (INTC), (MSFT); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Terranova owns (GOOG), (AMZN), (MON), (APC), (GMCR), (MYL), (MRVL), (BAC), (ADI), (ADBE), (AKAM), (HES), (CVS), (AXP), (EMC), (ABT); Jon Najarian own (APC) short calls; Jon Najarian own (COP) short calls; Jon Najarian own (CVX) short calls; Jon Najarian own (GS) put spreads ; Kelly owns (BP) puts; Kelly is short (GS)

For Joe Terranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (CASS)
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For Brian Kelly
Accounts managed by Kanundrum Capital own (GLD)
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For Brad Hintz
The following companies are or during the past twelve (12) months were clients of Bernstein, which provided non-investment bankingsecurities related services and received compensation for such services GS / Goldman Sachs.
An affiliate of Bernstein received compensation for non-investment banking-securities related services from the following companies GS / Goldman Sachs
In the next three (3) months, Bernstein or an affiliate expects to receive or intends to seek compensation for investment banking services from GS / Goldman Sachs.
Accounts over which Bernstein and/or their affiliates exercise investment discretion own more than 1% of the outstanding common stock of the following companies GS / Goldman Sachs.

For Gene Munster
Piper Jaffray Is A Market Maker In (GOOG), (YHOO), (BIDU), (AAPL)

For Anthony Scaramucci
Scaramucci and SkyBridge Capital own (GS)

For Pavel Molchanov
**No Disclosures**

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