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Get Positioned for Apple’s Sell-off

AAPL setting up for short-term pullback to 50-day moving average

   

Apple (NASDAQ:AAPL) — This company’s growth has been spectacular with earnings increases of over 80% each of the past five years. The stock has also had a spectacular run this year, up over 60%.

Much of the stock’s move is based on new product development. The iPhone 5 is expected to be announced today, along with refreshes to its line of iPod digital music players. These announcements likely led to the stock’s recent pop from just over $600 to new highs above $680.

Technically AAPL had two strong reversal days (down) in the past 10 days, setting it up for a short-term pullback to its 50-day moving average at $629.

Traders (only) may want to short AAPL on an advance resulting from product announcements with a target of $630. Please check with your broker for any restrictions on short sales and ask about options strategies that would profit from such a correction.

Investors who hold Apple may want to consider writing AAPL Nov 660 Calls at $36.90, which would protect your position to below our trading target, but there is the risk that the stock could be called away from you if it is trading above $660 on the third Friday of November.

09 12 12 aapl Get Positioned for Apple's Sell off

chart key 300x84 Get Positioned for Apple's Sell off


Article printed from InvestorPlace Media, http://investorplace.com/2012/09/trade-of-the-day-apple-nasdaq-aapl-4/.

©2014 InvestorPlace Media, LLC

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