Jon,
This post is mainly in response to your post to me a couple of days ago on the other thread (I haven't gotten thru the 500 plus new messages over there yet). Sorry, but I was on a business trip (the worst possible week for one to occur) and couldn't respond earlier. You stated basically that as a short-term trader, you thought that I had made a premature call on Apple's top, with respect to you analysis of MACD and RSI stats. To some extent, I agree with you.
I made a series of short-term trades in July Options this week and late last week. It gave me a gain of about 200 percent for the period. I did not do a very good job of trading in and out, but I wanted to reduce my risk by increasing my strike price.
On Thursday morning at the opening, I sold all of my options while the stock was at 37 3/4. I then sold a portion of my base long, long-term stock holding at 37 7/8 to lock in a tax loss (I desperately need one given my recent options successes). I am so far satisfied with my decision.
At the same time, Apple has surprised me since then with the lack of follow-thru on the correction. Today, for example, was a relatively low volume day, given yesterday's volume. Consequently, I am beginning to form the opinion that this will be a very short and narrow correction. This opinion supports your assertion made on the other thread (BTW, based on your statements there, I'm surprised you sold???).
Still, Apple is clearly overbought on the daily charts, and what we may be seeing is a new run-up to about the 40 to 42 level followed by a more definitive correction, so I believe any options play on the call side here should be short and without greed. Looking at daily chart after the last two earnings reports suggests that Apple should be in a protracted downswing for at least several weeks. Again, we may be surprised on the upside, partly because of the pending iMac debut.
I'm glad that only one analyst (that I know of) raised Apple's rating. As long as they stay pat at the 'hold' level, this stock is likely to keep climbing. Once they mostly become bullish, the main gain is probably over.
More later this weekend,
Sam |
