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Anonymous 2

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  • Why Apple Is Still A 'Don't Buy' [View article]
    5 days in June 2011 it closed at or below the 200 DMAL.
    This is NOT to be picky - but to "discuss" the extent to which a "close at or below" a MAL should be considered an action trigger.
    The reason for using a trigger based on a "close at or below" is used to prevent some of the whip saws when sellers finally throw the baby out with the bath water and panic sellers exhaust or reduce their extreme fear by lightening up their positions - and the stock goes back up.
    For example I like to observe the relative positions of the Open and Closing prices. The specialist usually has some control over where he wants to open and close the stock price based on his "book of orders" and his feel for a follow through, After all he has the info as to sellers and buyers and at what volume and at what price. So, as the price is dropping he has a pretty good feel, as to if sellers are "dumping' shares as the stock is moving down. By observing where the specialist chooses to open and close the stock provides some
    expectation that there may be a bullish case being created. Thus, an open high price and a lower closing price indicates an expectation of a continued bearish trend. But if the stock opens DOWN BIG and breaks through a support level (200 day MAL) and then turns around and closes at or above its open price that would be bullish. If it closes above its previous close that would be even more bullish especially if one were to also observe increasing volume as the prices moved higher. Thus, the chart shows that the JUNE break through was accomplished with a couple days with the stock closing at or below the 200 day MAL and continued to close lower than the previous close. But once the specialist felt like opening lower than the previous close but closed it higher and once the volume increased as the stock moved higher, this would be evidence of bills taking charge.
    As some vets will recall, the WSJ used to publish the opening price. There are reasons why the WSJ no longer does this - and it is not just because they do not want to waste ink. Something to think about.
    Oct 26, 2012. 10:24 PM | 1 Like Like |Link to Comment
  • Expecting Apple to Pull Back To $450 Before Going To $700 And Beyond [View article]
    Why not consider Selling naked Jan 2013 or Jan 2014 500 strike price puts at 60 or 90, respectively, gross, on the required margin at 50% of 100 shares at $500/share or $25,000 minimum required margin which (gross) would result in a $6,000 or $9,000 return or about 25 to 35% gross if the stock was anywhere above current value of around $500/share on expiration in 12 to 24 months.
    I'll let those who have the specifics with regard to the margin requirements and all the details and risks say what they need to say, but I am NOT Recommending this - just putting the strategy out there to get feedback on how to make better than a money market return in a 11 or 23 month period of time without any minimum required net move up on the stock at expiration - specifically any proce above the strike price of $500/sh - assuming not exercised and put to the seller of the naked options between now and expiration.
    To make 30 % on apple on todays price in 12 months paying cash would require the stock to be at ($500 X 1.3 =) $650/share or higher.
    This is over simplified and does NOT include the full disclosures but is provided to encourage those who have a bullish impression of apple at this price to discuss this concept of selling naked puts on any stock AFTER talking with your own Investment guru or stockbroker. There ARE risks not mentioned or implied or inferred in the above.
    Feb 19, 2012. 03:53 AM | Likes Like |Link to Comment
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