Sunday, March 24, 2013

AAPL Stock

Chart Multi-Month Downtrend in AAPL:

APPLE STOCK

As anyone knows that has been trading AAPL for any length of time, it has been in a strong and decisive down trend for months (since September 2012). I know many, myself included are wondering when the move lower will be over. So I have decided to take a closer look at how AAPL stock has been performing technically.

In the above chart I have drawn in support at $419 and resistance at $485. Once you draw these support and resistance lines, AAPL seems to be trying to digest the cliff dive it took from $705 back on 9/21/12. Because of the hear mentality my guess is a lot of people got hurt playing APPL and will be licking their wounds for sometime. With that said I do think AAPL has bottomed, but I also think it will trade sideways in this new consolidation channel for sometime to come.

Option Trade Ideas:

As you can see on the chart, AAPL stock is trading in the middle of its new trading range with implied volatility around 33%. I think implied volatility is a high enough level given the chart pattern of AAPL to consider selling an iron condor. Here is the one I am looking at specifically in the month of May:

AAPL Stock Iron Condor
Analysis of AAPL Iron Condor Using Mini Options
The above screen shot is displaying a May iron condor selling the $475/$485 callspread and the $430/$420 putspread. As you can see I am looking at the mini options that just became tradable on the 18th of March. A mini option is 1/10 the size of a regular option. So in this case it represents only 10 shares. 

You can collect around $6.12 for this $10-wide iron condor. It has 54 days left until expiration with a 55% probability of success. I think the probability is a bit higher looking at the technicals. for every 1-lot you put on you are looking at a max gain of $62 on $38 of risk.

Profit Range: $423.84 - $481.15
Last Close:   $461.91
Max Loss: $38
Max Gain: $62 (almost 2x)

Good Luck Trading!

In The Money Trades


And 1 favor that we ask: 

If you like the hard work we put into our blog posts and videos, PLEASE help us out by sharing them. Click the share links below and share them on FB, twitter, etc. It really helps us get more exposure and grow IN THE MONEY TRADES!

No comments:

Post a Comment