Linda,
Stay away from the puts at this point. For all any of us know, the downside is behind us. Actually, I expect to sell my Aug puts at or near the opening tomorrow. It depends. If Apple opens strong, I will probably hold for a retest of 41. If Apple opens weak, I will probably sell immediately. I may hold the Sep position a while longer, hard to say at this point. I have a profit in all put positions at this point, much to my suprise.
Phil mentioned a bottom (I think??) around 40 1/4. This seems like a good point to me. Look at the following chart:
bigcharts.com
Apple has reached a point on the chart where it could easily turn up, a simple retracement to the flag breakout point. OTOH, the stock could go lower to Phil's level, which represents a test of the 5-min, 5-day trendline from which the stock broke up from a couple of days ago. Further, the 38 1/2 (or so) level is a move back to the previous high before the present breakout. All of these points are short term turning points that are possible. Longer term (in weeks), and if the market gets weak again, the stock may move even lower. Seybold is something to consider, however.
At this point, I would start thinking about the Oct 40's or Jan 40's (calls). Strong short term runups will happen less often as the stock moves higher, so longer term options are probably the best bet (unless something indicates a quick runup is possible, like prior to earnings). Buy a few, perhaps 20 or 25 percent of what you are willing to invest. If it goes lower, buy some more. If not, then let your profits run. We have to remember that Apple is in a secular up trend now, and it will not end until bad news hits the stock. Play it that way. Depend on the fundamental posts on this board for overall guidance, and the TA posts for buy and sell points. Sell puts at highs, if at all. Average down with calls on lows, then let the stock run. I kept picking up the Aug 35's each time the stock hit 33 and change. It paid off with a 600 percent gain on one of the buys, over 400 percent overall in a very short time period. Such moves will not happen in the not to distant future.
Comments?
Sam
P.S. My daughter is 15. I'm getting there, but I am not that old as of yet, just 53! Her jaws are wired shut for two weeks. Imagine the feeling. |
