Pullback Trade in AAPL

[Steven Place]

The stock saw a healthy gap lower on some analyst report that their iphone sales will be light.

From a technical standpoint, prior support at 122.50 acted as resistance, and anyone who bought stock in Feb-Jul and was hoping for a little more upside are now sitting there waiting for a turn higher (again).

That’s the bearish case that suggests upside is limited. But I also think downside is limited too.

For the past few months AAPL was stuck in a range from 107-115, and we’re coming bac into the low end of that range. Odds are that as we head lower the selling will continue to slow, especially going into the holiday season. On top of that, the analyst downgrade gap will most likely be filled before any true selling comes in.

Here’s the trade:

Sell to Open AAPL Jan 110/105 Bull Put Spread @1.15

ADD to the trade at 1.50 with an order to close at 1.10

ADD to the trade at 2.00 with an order to close at 1.60

If you are able to add and scale out, be ready to re-add at prices 20 cents higher than the add price.

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[Steven Place]

1.50 is getting hit, so time to add.

Sell to Open AAPL Jan 110/105 put spread @1.50

Close this round at 1.10.

[Steven Place]

Nice gap up in AAPL, going to take profits on the second round of spreads here.

Buy to Close AAPL Jan 110/105 Put Spread @0.90

This leaves the first round on still at a basis of 1.15.

[Steven Place]

AAPL once again failed to move above 120 and the overall market is soft.

I’d rather take profits here with intent to reenter on a deeper pullback instead of being forced to re-add and trade around a position that’s losing.

Buy to Close AAPL Jan 110/105 Put Spread @0.50

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