by John Jagerson | November 18, 2013 8:34 am
If someone on your Christmas list is asking for an Apple (AAPL) product — the new gold iPhone 5S, the new retina iPad Mini or any of the new products the company has announced this year — you are not alone. AAPL products seem to be climbing to the top of wish lists everywhere. AAPL shares also seem to be climbing to the top of traders’ wish lists.
AAPL completed a bullish continuation pattern — referred to as a “bullish wedge” — last week when it broke above $520, and we think it is in for a good run. Based on the bullish $50 move headed into the continuation pattern (from the breakout of the inverted head-and-shoulders pattern at $490 to its recent highs at $540), we are setting our price target at $570 (adding $50 from the breakout point of this bullish wedge at $520). While we are anticipating a strong move in AAPL, we do not expect it to be a short-term phenomenon. We are anticipating AAPL is going to climb through the end of the year, and beyond. That is why we are giving ourselves plenty of time in this trade with a February expiration date.
We’ll be watching the inventory levels for iPhones and iPads heading into the holiday shopping season to gauge consumer demand. We’ll also be watching any developments on what AAPL management may or may not do with its cash hoard in the coming months.
Recommendation: ‘Buy to open’ the AAPL February 560 Mini Calls (AAPL7140222C00560000).
InvestorPlace advisors John Jagerson and S. Wade Hansen are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next trade and get 1 free month today by clicking here.
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