Thursday, May 31, 2012

The Hold Up With AAPL

As you know, I've been looking for an area to add some AAPL July Calls (I already have several) to replace the June Calls sold yesterday.

This is my problem and what I'm waiting on.

I don't like the relative negative divergence on the AAPL 5 min chart which is even worse today. I have July Calls in AAPL so it's not like I'd be missing out if I didn't add the new calls as intended, but at the same time I have to be realistic; SMART MONEY SELLS INTO STRENGTH and AAPL has had about 5 days of higher highs, so I suppose it's not realistic to expect accumulation in AAPL at this price level. That doesn't mean AAPL can't move higher, but it doe mean any accumulation for the AAPL move higher was already completed and now it's selling in to price strength, but that doesn't give me the high probability signal that I want to add to the position.

An alternative...
Since it's probably not realistic to expect that 5 min chart to shape up, a move through this resistance area around $580 WITH an unambiguous move up in the market, may be enough for me to add the position. I don't like chasing, but if AAPL moves in to a stronger short squeeze area and it has the market's support, that may be worth riding.

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