Finally, 20 on 20 covers everybody’s favorite stock: AAPL. Today’s been a weird day - when we looked this morning we were ready to talk about the 200-day simple moving average as a source of resistance, and it’s been proved more quickly than we anticipated. It seems like $595 is a legitimate resistance point in the short term (or so today’s sellers would have us believe) and we’ve already identified $520 as a support level (see chart above).
So what does this mean? Well, it may mean that the best trade here is an iron condor, using $520 and $595 as the short strikes. It’s always possible that AAPL could move 100 points in either direction at a moment’s notice, but we’ve got to trade something, and this action is too strong to ignore. We’re definitely interested in finding a trade, and the IC is as good a place to begin analysis as any.
Beyond that, we could use today’s drop to enter some more bullish trades, if we really feel confident that this drop is temporary. There are more than a few people out there doing exactly this - loading up at lower prices and getting ready to exit after a nice spike. It already happened once, as that’s probably what the selling at $595 was today - people exiting profitable trades (or getting out of old positions at breakeven).
As our subscribers will tell you, AAPL is a frequent target of our attention… you might even call it the “apple of our eye”. If you sign up for our Options Strategy Alerts, you’ll get all the trades (and, unfortunately, all of the puns). Enjoy!