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Home › Forums › Swing Trades › Failed Breakdown in AAPL
This hasn’t triggered yet but I’m going to show you exactly the setup to take.
Here’s a 30 min chart of AAPL.
There’s an obvious level of support that was breached yesterday, but it seems to have no follow through.
When a level fails to break we often see a rejection back into the previous price range.
Here’s the setup:
On a break to a new HOD ( that would be price clearance above 106.76), get long the Feb 105 calls. They’ll probably be going for 5.75 – 6.00
IF THERE IS NO BREAK, DO NOT ENTER LONG.
I like calls straight up because the theta won’t kick in as we are headed into earnings season.
To define a stop, I’m taking the open range of 1.50 and subtracting it from the day’s low, which is 103.75.
First target will be 109.39.
First target hit, time to scale some:
Sell to close HALF POSITION AAPL Feb 105 calls @7.20
Trade is going great, what I’m going to do now is reduce my risk by ROLLING the calls to a higher strike.
This will take more cash off the table but still leave me with long deltas in AAPL.
Sell to close Feb 105 Call @10.10
Buy to open FEb 115 calls @4.00
Net credit: 6.10
I’m also moving the stop up to 110.75, which is just under the late-morning pivot from yesterday.