This week’s Apple trading strategies (7/26-7/30)

A place for Apple traders and investors to share their best ideas — fiscal Q3 2021 earnings week.

To get things rolling, something different: an actual trading strategy. In this video we get to follow the thought processes of a young Robinhood user as he made a couple quick trades before work Tuesday selling near-term Apple covered calls.

Below: Apple vs. the S&P 500 last week, normalized…

apple trading strategies 7-26-21

Disclosure: Although I am now an Apple shareholder (see Why I bought a share of Apple, my first), I am in no position to give trading advice. Don’t blame me if you drain your IRA doing something you read about here.

See also last week’s trading strategies.

3 Comments

  1. Gregg Thurman said:
    Last week I made a mistake. I was spending the weekend at a friends cabin on Lake Coeur d’Alene. It is idyllic there: very short walk to water’s edge and his boat dock, quiet and beautiful.

    The only problem was the lack of WiFi and cellular service. Knowing of it’s deficiencies and that I wouldn’t be home Monday morning I calculated what I thought would be the low that morning ($1 decline from Friday’s Close). Then, just to be safe I selected a Call Spread a $1 lower than I normally would and placed an order for $143/$144 Call Spreads @ 65c. I was surprised by how cheap they were, normally a Spread that deep in the money would cost about 80c. When I arrived home I found that my Order had filled and AAPL was trading in the $141s. My just acquired position was several hundred dollars underwater with a steep hill to overcome just to get back to even.

    What to do? Giving the situation a lot of thought I did the only thing I could: I bought an equal number of $141/$142 Call Spreads @ 59c with the thought they would partially offset any losses I might sustain. Along the way I hoped my original position would recover a bit as well. Then Tuesday, followed by Wednesday, Thursday and Friday happened. At the Close Friday I had twice as much invested as my strategy calls for and AAPL Closed $2 above my “mistake”. What a very nice turn around from Monday’s decline.

    3
    July 25, 2021
  2. Gregg Thurman said:
    So here we are going into earnings with the last two being disasters for AAPL. Of course they were disasters, because Apple destroyed expectations and the market couldn’t believe it’s eyes, selling off the world’s best managed public firm.

    This week, being mindful of two things: the last two earnings reports, and that historically AAPL bounces up ~4% from its pre-earnings Close.

    I’m going to invest a much smaller amount with a higher yield in anticipation of a positive market response. If we don’t get it I’ll have less at risk thereby mitigating my potential losses. If the market responds positively (and with 3 days remaining to expiry) I’ll invest the balance of funds dictated by my strategy with a much lower yield (same contracts bought with high yield, but now lower because AAPL has gone up).

    I think the setup is good for investors: AAPL’s ISM is a solid 15 points lower than January’s, and AAPL’s RSI has dropped below over bought status. An equity is thought to be overbought when it’s RSI is above 70. Earlier this period AAPL’s RSI has been 80+. Currently AAPL’s RSI is 65 and falling.

    2
    July 25, 2021
  3. Jerry Doyle said:
    I’m fearful of Apple not providing forward guidance Tuesday. If Tim & Luca do provide healthy forward guidance, then step aside; hats off in hands, Spurs moved in, heads leaning forward, we’re in a horse race competing with ourselves. 🙂

    1
    July 25, 2021

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