Play Recommendations: Play 22 (closed)

Lotto Weekly Options:

Nov12 525 C (closed)

Nov12 515 P (closed)

Nov12 530 P (closed)

Nov12 570 C (expired)

Nov12 555 C (expired)

Nov12 545 C (expired)

Nov12 540 C (closed)

Monthly Options:

My puts made a huge profit and when the Bull 180 showed up, I got long stock and calls and banked another great Lotto Friday trade.

Too bad AAPL could not keep heading higher on up to $555, but that milestone will happen next week if AAPL holds  $520 - $525.  Will this be the bottom for AAPL? That depends on how many traders still have margin calls hitting next week. With today's big reversal, they may have just missed it; however, if AAPL is taken down again next week, the selling will continue.

What I did notice was today's capitulation selling was not really a true capitulation event. The volume was not as strong on the selling side as I would have liked to see into the reversal Bull 180, so I an not 100% convinced this will be the final bottom. With next week being a shortened trading week, we could get some higher ground in anticipation of Black Friday sales. The following week will be the proof of life for AAPL and the Santa Clause rally may be coming!

What I did feel as I was trading today is there were definitely buyers. I was able to trade shorts, long and options with instant fills and this a good sign we are at a bottom and hopefully "the" bottom!

Now we look at the charts:

This semi-capitulation reversal today brought AAPL right into my projected zone! If AAPL pulls back to test this reversal next week, then I want to see it hold my "red" zone before I commit large capital to longs; and if it rallies next week, then I will make today's low my hard stop and trail it up $4 at a time.

If this is the bottom, then you definitely want to pick up some Jan2013 calls.

Dec $555 Calls

Daily Chart

Weekly Chart

Monthly Chart

Today's intermediate charts ALL show a strong Bull 180 reversal pattern.

Here was the action on the PUT. As you can see, you had to be quick on the trigger to capture the morning drop before the reversal started.

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11/15/12 - AAPL went for the capitulation sweet spot just above $520 with a low of $522.62 today; however, I do not think today was enough and I am looking for one more down to $500. If we get a rally tomorrow, I would not trust it unless it powers back up over 5% and closes at the high of the day on very strong volume. I added 515 puts and 540 calls for tomorrow lotto trades.

Profits Up!

The donFranko

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11/14/12 - Capitulation day coming soon! AAPL traded flat most of the day and then sold off with rising volume in the last two hours of trading today.

Take a look at all these time intervals below. You will notice they all have a similar candle pattern with a single SOLID green bar followed by continued selling. This is something I have been watching on this stock and now I have been seeing it on a lot of stocks I follow. When you see this happen, TRUST a short with a strict stop loss above the high of that reversal candle.

This pattern, indicates big sellers are fading any gaps up. We are not in the 8th weekly drop so this is going to be a decision week for AAPL. I am hoping we get a capitulation day tomorrow and Friday will be the turn for higher ground so I will be putting on my straddle in the morning.

If AAPL gaps up and holds it I will get long calls and then short puts at the end of the day unless AAPL takes out the low of the first 15-30min bar. If AAPL gaps down I will get aggressively long with calls if it holds the low after the first 5 - 15 minutes and if that fails I will buy the puts.

The next measured move in AAPL should be 8 - 12% so be sure to pick your strikes that are within 8% to assure you have the best chance at a big profit!

I would not buy puts lower than $520 and calls higher than 570 or $555 if the stock moves lower tomorrow.

Profits Up!

The donFranko

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11/13/12 - What started to be an exciting day to the upside fizzled out by the end of the day and the selling accelerated again. The stock managed to make a slight positive close. It did test a key support area but I am looking for a capitulation day so we may get it tomorrow or Thursday I would prefer it happen Thursday so the calls will bet really cheap and I can jump on for a  Lotto Play.

Currently the first target for me if AAPL holds this current price is $555 then $600. I took sold my 545 calls for a profit and took off the bulk of my $555 calls then I used the profits to pay for the 570's for a lotto play. Depending on how the stock moves tomorrow and Thursday, I will add more for Friday.

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11/12/12 - No follow through yet to the upside. AAPL gapped and crapped out on the first 15 minute bar. I shorted the stock and waited until later in the day to put on a straddle closer to the money

Today's action looked more like pumping and dumping but I over weighted the calls before I added the puts and now I am not so confident this will be the right side. If AAPL breaks down tomorrow, I will ad more puts to offset the calls. The Bull 180 started to set up

Put prices

Call Prices

Profits Up!

The donFranko

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11/11/12 - With AAPL ready to make a solid Bull 180 reversal, I will put on a straddle by buying 10 of the Nov12 580 calls and 1 of the Nov12 545 Puts.

I am looking for the stock to rise 8-10% this week. If this play works as planned, I expect to make up to $20k on the calls and that will more than pay for the loss on the puts.

Total investment for this spread is $2475.00, so the stock has to move at least +6.5% to guarantee a break even. This does not take into account implied volatility which can make the profits happen faster.

Depending how AAPL opens tomorrow will determine my entry points.

If the stock gaps up in the morning and fails to hold the first 15 minute high, then I will start the PUTS and adjust my call strike accordingly if the stock moves back OVER the first 15 minute high.

If the stock gaps down and starts to rebound back to the high of the first 15 minute bar, then I will start my calls and wait for a pull back to add the puts unless the stock holds the low of the first 15-minute bar. Then I will just keep calls on and follow up ready to add the puts by the end of the day.

I will post my trades once I place them.

You can adjust the calls but buy a minimum of 5 as for the puts you MUST buy as close to the money because you need the DELTA working for you. If you prefer more insurance, then buy 2 but this play is biased for a  bullish reversal.

Current Calls:

Current Puts

Here is how this play can work out:

If AAPL falls 10% here is what the puts will do:

Profits Up!

The donFranko