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Allan Tan's  Instablog

Allan Tan
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Dabbling in options trading via different strategies. Does some forex and stock trading as well. Constantly learning more about the numerous ways of reaping in profits from financial vehicles.
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Option Trading Strategies
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  • How Far Up/Down Will Apple Go In The Next Two Weeks (Part 3)

    (click to enlarge)

    To continue on the Apple (AAPL) monitoring from yesterday, it seems that AAPL will be trying the $622.50 resistance and should have no problem touching it, but will it fall or go higher?

    With my charts, it seems that majority of the indicators are in favor for uptrend up till $633 by end of this week.

    So as long as today AAPL crosses $622.50 and does not fall lower then after, or closes above $622.50, there is a possible weekly option trade at the end of the day.

    Up till now from Monday, we have gathered and believe that AAPL has an average range of 40-50 points on a volatile week. It is very unlikely that it will crosses past 60 points but then, the stock price has increased so much the last 3 months, so in terms of percentage movement, it is still possible for AAPL to move slightly over 60+ points, beware.

    So if today towards the late afternoon, towards the close, if AAPL move to $634, I would want to open a bear call spread credit position using strikes at, 655-660 calls, and that should give a comfortable $0.25 or $0.30 credit, a 5-6% ROI. And this trade should expire worthless by Friday.

    That is purely my individual observation and trade idea for myself, if you choose to use it, please use it at your own risk.

    Leave me a comment if you like what you seen so far.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.

    Tags: AAPL
    Apr 22 6:15 AM | Link | Comment!
  • How Far Up/Down Will Apple Go In The Next Two Weeks (Part 2)

    Before the open on Monday (article was not approved hence I changed it to become an instablog), I wrote that Apple (AAPL) would most probably come down even further from last Friday's drop, and indeed that happened yesterday, and today it dropped even further.

    Based on my charts, it did come down so hard to cross all 3 support lines, but not long after shot up by at least 17 points (at the time of my screen shot) (click to enlarge)

    Too bad I wasn't watching the open, if not I would have gone into an options play, probably a bull put credit spread at 535-540 for at least $0.20 credit for 4 days of exposure on the weeklies. For an average week, AAPL will move within the range of 40-50 points in a week, corrections, a volatile week. So Monday and Tuesday it has already traded a 40 points range. We can pretty much assume very safely that the week's range will be another extension of about $10+ down from $571 or $10+ up from $610.. So my imaginary trade of BPS at 535-540 would be very safe to even initiate at today's open.

    A small 4% ROI for 4 days exposure is pretty decent. Imagine making 4% ROI for 25 weeks, in a roll? You do the maths. We will see how AAPL fare tomorrow and see if its possible to get into a trade. Watch this space.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.

    Tags: AAPL
    Apr 17 11:32 AM | Link | Comment!
  • How Far Up/Down Will Apple Go In The Next Two Weeks

    Following a 17 points drop in Apple (AAPL) on Friday, and a 4 consecutive down days, it seems that the recent correction the market had, has been successful passed on to the "trillion-dollar" company. Ironically, it happened right after Bank of America Merrill Lynch raised price target from $730-770. So how far down will it go?

    Inside the investors mind right now would possibly also be how will Apple share prices be like after the earnings on Tuesday, April 24, 2012 after closing bell.

    Just some quick facts summarized:

    i) MSN Money's Stock Scout is rating Apple a big 10 over 10.

    ii) out of the 930 million shares available to be traded, 69.36% are owned by financial institutes (big players).

    iii) Apple has got quite a number of legal issues, e-book pricing, 4G misleading marketing move in Australia and the China's pollution audit, just to name a few. (temporary bad news)

    iv) record breaking $10 billion stock buyback plan along with the $8 billion in dividends.

    v) 4 straight down days right after it hits $644, its 52 weeks high or even highest ever.

    vi) Supports at: $597.59, $589.96, $576.40. Main resistance at $632.34, followed by $639.97

    vii) the recent launch of the new IPad, should contribute to some good figures for revenue and outlook of the next few quarters of 2012.

    viii) from the 3 years chart, it seems to show that 2 weeks leading up to earnings, Apple has most of the time climbed upwards, but perhaps only 60% of the time.

    Based on these points plus with some chart analysis, I am long term bullish on Apple, but yet, within the week I would think that it will drop further from last week, if not trade sideways for the next two days. possibly crossing the 1st and 2nd support. And if it does crossed the 2nd support at $589.96, I would be very interested to do some weekly option trades, credit vertical put spreads in the region of $555-560 strikes for a $0.25 premium.

    Or if it does goes up with 2 green days, depending on the stock price, I could also do a bull put spread in the region of $585-590.

    Watching the market and Apple to see how it could possibly happen over the next few days. I will post an update again.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.

    Tags: AAPL, options
    Apr 17 2:36 AM | Link | Comment!
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