I love Expiration Friday weeks. They are so nice to play. Generally I watch for stocks that rise the first part of the week and then have a pull back close to expiration Friday.
AAPL had a huge several days to the upside. The talking heads were flapping their lips, drooling over AAPL and the possible $600 mark. I learned yesterday from a site I frequent that some firms that buy stocks for the dividends were buying AAPL. (http://www.inthemoneystocks.com/) Click in the right corner for the videos. They are also on Youtube.
The problem is AAPL does not pay dividends so I was wondering why were these firms buying AAPL?
This may not be true (don’t know if legal) but I was thinking if I were a firm and my profits hadn’t been terrific and I needed to make some fast money; wouldn’t I buy AAPL,run it up and then sell before it hit the mark that the talking heads were beefing up? (You know $600?) This morning there it is was… my play I love… AAPL out of the Bollinger Bands on the 5, 8, 10, 15, 21, hitting the top of the 34 and quite a distance from the 20 moving average on the daily.
I bought 1 April Put contract for 33.70 and sold it in less than 30 minutes for 37.94 or a profit of $414.00 or 12%. I am done for the week. BTW I did have to chase it somewhat but I set my target and decided if it goes above that forget it.
You can see this PUT trade on the 5, 8, 10, 15, 21 and where I made my decision on the 34. I enter right near the open off the 5 chart. I used the 15 as my chart to exit the trade because this chart had the strongest resistance. If AAPL didn't punch through that resistance I figured I need to exit. You can see that there was two small moving averages as well as a 10 and a 20 moving average for AAPL to completely go through on the 15 for it to go lower. When AAPL did not send out a follow up candle that opened below these moving averages but used these averages as support I was outta there PDQ.
Impressive - nice job.