Play Recommendations: Play 19

(Weekly Calls)

Lotto Weekly Options:

OctWk2 - 645C (Expired)

Long Stock: (scalping)

Monthly Options:

Nov (pending)

10/12/12 - A very quiet day of trading on AAPL resulting in a Doji candlestick which indicates a definite change is coming. With two more weeks until earnings, we could see some more selling next week. Maybe even a capitulation day testing the 200MA. When stocks get close to either a $100 move or the $100 price (meaning whole numbers) they more often than not hit the whole number, so we could see AAPL make a move to $600 which was a benchmark price it bounced around at several times. My 645 calls expired

Not much action today but here were my trades on AAPL:

Here are the November options activity.

Profits Up!

The donFranko

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10/11/12 - What started to be a rally was quickly wiped out and turned into the beginnings of that capitulation event I am looking for. Volume picked up but I still would like to see one more continuation drop tomorrow on even more volume. What I picked up on was an interesting thing thing to me. The bottoming tail from Tuesday put in a low at 623.55. For me, I like to take notice when stocks make pivot moves, bottoms, tops or closes on a Fibonacci number. I view this as trade psychology and/or maybe inside "code" for a change coming. The action today stopped short of the gap down from Monday which makes things a little more confirmed in most minds the rally has failed, the top has been put in and all hope may be lost...blah, blah blah...this is Apple! I want to see just one more bite taken out and then I will be looking for an earnings run to start, espeically if GOOG beats next week.

After hours shows some upside interest:

Tomorrow I will be watching the action around 7:00 am and looking for my next move to make a day trade and make up for my 645 Calls that are getting crushed right now—It's a free ride trade, but I still would have liked to see it profitable.

The weekly  chart shows a stop at the 21MA today and so long as AAPL holds this line, we should see a move to the upside with market support and NO MORE NEGATIVE NEWS!

Call options are still on the climb. Notice how the 700C took a big jump higher

Weekly Options did not get any more action today

Calls

Puts

Profits Up!

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10/10/12 - Not a very strong day for AAPL but a least it was an up day! Even with all the mixed news, analysts ramblings and market drop today, AAPL managed to hold ground from the open; however, the volume was just average. I did jump in today after the first 30 minutes  and it was looking like a good play, but once lunch came around the stock slipped back under VWAP the rest of the afternoon. I exited my shares and tried a couple of puts but I sold them when AAPL would not sell off while the DOW was moving lower. This could be a good sign heading into the end of the week so I reduced and kept on 1 of my Weekly 645 Calls.

I am still testing the waters with small shares and contract loads so I can get a feel for where the stock might make its next move.

Current Open Trade:

Here are the Nov options open interest:

Here are the this weeks options which had a lot of volume at the $650 strike on the call side.

Here is the daily chart for my 645 calls

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10/9/12 - Up, down, all around is what AAPL has been up to so far this week. As I suspected, the stock did move lower but with option premiums at ridiculous  levels, it's been very difficult for me to day trade them without taking a lot more risk than I am willing to. I am waiting for a solid test of the 100MA on the Daily chart and AAPL could very well blow by that and test the 40MA on the weekly chart too if the negative news stories keep coming out.

Today the "guru" traders on Fast Money as well as Cramer are saying AAPL is a buy here, so we may see some activity to the upside tomorrow. So far it's not having any effect on the stock in after hours trading:

For the most part, when I hear that from the TV "guru's", I look for more selling...lol. 

Typically, Wednesdays are a pivot day, so if the markets get good news, as well as AAPL, then we could see the beginnings of an earnings run into next week, but I am hoping for a nice bounce tomorrow off the 100MA with strong volume. If the stock does open up tomorrow, and it holds the open/gap after the first 30 minutes of trading, then I will get long again with stock and start a small Call Option position. The challenge with AAPL is if you get in, then you just have to hold on for the ride, so risk only what you are willing to lose on the options.

Ok, let's look over the charts:

As you can see, AAPL is trending at the bottom of my channel and closed below the long term trend line. The volume was very low today which shows me the rally into the end of today may not have conviction. I still think the 100MA will be fully tested but as you know, anything can and will happen with this stock.

The weekly chart still looks like a drop to the 40MA is possible, which is what I would like to see; however, the longer trend line suggests we may have tested the old resistance back in March and the 21MA is the pivot. The only clue here for me is the volume today was very low which indicates a capitulation event has NOT happened yet. I like to see falling stocks test a major MA with very high volume. That way I feel all the sellers are out of the way and the shorts are forced to cover.

I tested the water today with a Long off a Bull180 setup this morning, and when it failed, I tried some Put options to see how they were reacting.

I like to test the waters with a small position to gauge a bias. As you can see, managed to make a small profit. I took off for the rest of the day and true to form, AAPL bottomed right after I sold my puts; however, I did not catch any of the retracement today.

No biggie, I prefer to miss trades like this because it tends to bring up bad memories when I used to chase my losses and lose a whole lot more than I have ever one on stocks like AAPL. Entry is Key...Exit is Everything! ^TM

Looking over the 15min chart, you can see how VWAP plays an important role on how a stock moves around during the day. If AAPL drops under VWAP tomorrow, I will be looking for a capitulation event. Hopefully it will be a solid Bull 180 setup and then we are off to the races!

The weekly options are all over the place which makes trading a particular direction difficult. Look at the massive volume on both sides of the action. It's looking like $650-660 will be the next battle ground if the stock moves higher.

With AAPL earnings coming out after Oct expiation, we need to track the November options to get a clue on where the money is heading.

Calls:

Puts:

I will be tracking the activity of these Nov options going forward:

My bias is like everyone else's out there, LONG, but I will definitely have puts at earnings time.

Profits Up!

The donFran

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10/7/12- The heat is on and the nice Carmel sugar coating on apple is melting away. Question is, will are we bobbing for October apples or drowning because there will only be one left at the bottom of the barrel?

This stock has struggled to maintain record setting highs for the past 9 trading days and Friday it finally made a solid run under $666.00 which has been a battle ground for the past few weeks. Is this the beginnings of a longer term sell off or just some needed profit taking ahead of the upcoming earnings release set for 10/25/12?

The ramblings on the financial channels is AAPL is having difficulty meeting demand (dah) therefore, that will hurt sales figures for this quarter. The iPhone 5 release was a week short for sales to make this quarter; which translates into millions of dollars that will not show up on the balance sheet, but rest assured, it will be there for Jan earnings. The consensus is AAPL will pull back under $650, possibly even make up to a 10% move lower in some circles.

On Friday there was a report that Foxconn (manufacturer of the iPhone) has a strike in the city of Zhengzhou and that makes timely production very, extremely, difficult. If this keeps the brakes on, then AAPL will suffer going into the Holiday shopping season. You can make a sure bet the analyst community will start talking about cutting earnings estimates and we may even get some downgrades this week. This will no doubt put more selling pressure on the stock if that happens.

Because the companies short-term future is solely resting on the iPhone, and if they cannot deliver, fund managers will take their money (massive profits) off the table for the rest of the year; however, if they beat and/or surprise, with say, a split, then watch out because the race will be on for top spot between AAPL and GOOG by the end of this year.

What we need to watch is the short interest and the OTM puts and call options for clues.

The weekly chart shows us the sale is on, but will it continue and/or accelerate this week? It's always a bit of a crap shoot when shorting AAPL, so you have to either put on a trade and just see what happens or sit in the trading chair ready to act fast during the day in order to capture the volatility this stock offers—that is where I will be all week!

The daily chart is looking good for a drop under $650 this week with a target bounce off the 100 MA

The weekly options are packed with big time premium and that makes it difficult to make money if you are buying and holding, but AAPL tends to move $10 - $30 bucks in a day, so you just have to be ready to take profits when you get them.

Look at the ATM 650's and you are paying $10 premium for the calls and $7.00 for the puts. That's highway robbery!! And if you want to speculate with OTM options notice how the puts are pumped up more than the calls.

You really have to take a chance with AAPL so if you cannot watch it all day, just wait until earnings on the 25th because there is sure to be some fireworks on this one.

Short interest is low heading into this week, but I will keep an eye on it.

This earnings season is going to be exciting!

Profits Up!

The donFranko