PLAY: Reload half of your AAPL October 380 Calls (O:AAPL 11J380.00) at market, good for the day.
Dear Bottarelli Research Member,
Well, we’re seeing something that we have rarely seen with Apple (AAPL – NASDAQ). That is, a sell-off prior – and also after – a scheduled news event.
Typically, you see a run-up leading into news events, followed by the typical “sell on news” scenario that’s now gotten pretty common on Wall Street. But as you can see, Apple has fallen leading up to this event, and the sell-off is also extending after the news today. As you can see, this is bringing Apple right back down to the best support levels just below the $355 mark. Twice in August, this level sparked a bounce. Will it happen again here in October?
After following most of today’s launch announcement, it’s clear that investors are selling off the stock due to their preconceived expectations not being met. For example, never mind the fact that Apple announced new Apple stores (with two major ones in China), booming software downloads, and rapidly expanding market share. Investors wanted to see the iPhone 5, but instead they got the iPhone 4S.
Call it what you want, but this simple name change is causing today’s knee-jerk selling pressure. The 4S is equipped with a more powerful processor, with speeds “twice as fast” and graphics “up to seven times faster” than the iPhone 4. But again, this is where Wall Street stops listening. They wanted the iPhone 5, so no matter what occurs, they’re going to trigger selling pressure on Apple.
A reaction like this is why we sold half of our calls earlier today on the pop. Since reactions like this are common, taking profits ahead of news announcements is always a good idea. But now, since this move is offering us the chance to re-buy Apple right the August lows, let’s reload the half of our calls that we sold earlier. This will lower our cost basis and get us prepared for the dip-buyers that should start circling the wagons around Apple soon. Here’s the play…
PLAY: Reload half of your AAPL October 380 Calls (O:AAPL 11J380.00) at market, good for the day.
And as always…
Lock and load!
Sincerely,
