Play Recommendations: Play 21 (closed)

Lotto Weekly Options:

NovWk2 560 C (expired)

NovWk2 565 C (expired)

NovWk2 530 P (expired)

Monthly Options:

AAPL is still in full Bear Correction status and is down a whopping 22% from its all time high. This will definitely start a slew of margin calls on many investors accounts next week, so we could definitely see more selling over the next week or two if the stock does not put on a strong rally Monday or "turn around" Tuesday.

Next week is Nov options expiration, so looking over the strikes, I see a massive amount of open interest at he $550 puts. That means to me AAPL is finding support. Today the stock  traded just under $555 so now that is the line in the sand next week and it must get over $555.00 just like it had to get over $666 back in Aug-Sept. The 200 MA is currently sitting just under $600, so that is the upside target once AAPL shows a strong close over $555.00.

Here are the charts with my expert insight and comments:

My gut is telling me AAPL should have one more capitulation day before it makes a solid move higher, so I will be looking for a solid Bull 180 pattern on the daily chart before I commit large capital to a long position.

It has now been 16 trading days since AAPL has put on a two positive closing days in a row. I was expecting it to bounce back on Tuesday at the 200 MA, but that was the kiss goodbye, and instead, the stock gapped down on Wednesday. Now that 13 trading days (Fibonacci) have not produced a bounce, we could not see one for 4 more days making it a 21 Day reversal which puts us into Friday Expiration. That could make for us a very nice LOTTO play opportunity and with options expiring, things could get very exciting...stay tuned!

From a technical perspective, this stock is teetering on broken and long-term correction, but AAPL tends to pull rabbits out of their hat, so if you are a short player at this time, you have to be ready to cover quickly; because if this stock catches a solid bid, the rise will be very quick!

I will start accumulating OTM monthly calls under $600 and watch for weekly trade opportunities shorting until $555 is cleared. I did see the Nov 600 calls had a massive amount of volume today (13,215), so that is evidence that bullish investors/speculators are still out there. The puts had some strong volume from $520-$540 which is the double bottom support from Feb and May; and that is most likely where AAPL will find the bulk of the buyers next week if the stock fails to move higher.

If retail sales fall off over the next few weeks, then AAPL could be in for a long-term correction and stagnation until Jan earnings and If they miss earnings estimates, then look out below. What I have been hearing/reading about AAPL is how they are becoming a "value" or "dividend" stock. That is to say, the "growth" of the stock is coming to an end, and now that they pay a hefty $10 dividend, it's becoming a stock that investors and fund managers will want to accumulate to just collect money from it. If that is the case, then the stock will settle back down into the $400's and flounder around for a very long time; however, this will give us plenty of range bound predictable trading too.

There are still calls for $800 plus price targets, so keep your trading powder dry and get ready to make some more money between $555 and $666.

Profits Up!

The donFranko

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11/8/12 - Wow, AAPL is getting pulverized into applesauce. This stock has been taking a massive beating this week. If you were short then you are extremely happy with your trades right now. At this point, you just cannot speculate with either side unless you like to gamble. I would hold onto any puts into next week and add calls for insurance if the stock rallies tomorrow. If you have shares of the stock short, then a tight stop  at $550 is where the action will be happening on a rebound tomorrow.

If you already have very large profits, then consider taking them now that the stock has sold off over 20% from its all time highs; and jump on puts if the stock moves fails to rally and falls back under VWAP on a 15 to 30 minute chart tomorrow. If AAPL does fail to rally tomorrow, then most likely there will be even more selling next week as millions of investors will be getting margin calls and will have to continue dumping their stock. I am hopeful there will be a rally tomorrow, but I am not confident it will be sustained until this stock consolidates all these losses before it resumes an upward trend back over the 200MA on the daily chart.

I was expecting the rebound rally today so I was sucker punched twice this morning and I did not buy any puts; however, I did buy calls for tomorrow and will add puts if the stock continues to sell off.

Here is the action today on select Weekly puts.

NovWk2 540 Puts .60 - $7.00

NovWk2 550 Puts 1.60 - $15.00

NovWk2 580 Puts $6.00 - $43.00

NovWk2 555 Puts .60 - $19.00

NovWk2 545 Puts .60 - $10.00

As you can see, if you have the risk tolerance to get in front of a stock moving like AAPL did, you can make substantial profits. Trading weekly options.

Profits Up!

The donFranko