Friday, May 26, 2006

Symetric Triangle in AAPL

There is a long term symetric triangle in AAPL. The stock recently bounced off the lower end and the 200 dma, it is poised to reach the upper end around 70 soon. I got into this one today with some AAPL June 67.50 calls and will be looking at getting some June 65's tomorrow as well. There are more details about my reasoning in the chart below. Click on it and zoom in to read my comments.

Also, check out the link on the right hand side of the page to "Market Observations." I agree with the author about GOOG being good for a quick bounce trade. It seems to have found support at 360, the upper end of a gap zone, and is poised to head higher, perhaps the mid 400's is achievable. I like the 390 calls because the premium isn't that bad considering it's GOOG. The stock has been in a 10 day period of decreased volatility which may change very quickly if it breaks 385 and runs. In otherwords the implied volatilty may increase on those June calls and you can make money on that as well as the stock appreciation. A word of caution, there is some resistance at 390 and the 50 dma lies there. I would target 400-410 on this trade and don't expect 390 to present too much troublle if the market agrees.

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