Thursday, January 10, 2013

AAPL Calls in the Green

Everyone has a different methodology with options, my preference is to not go for home runs, but to use them when I feel there's a good signal, but not enough profit potential, so the leverage of options is appropriate at that point.

I want to get out of them before the first major consolidation or pullback.

I'm probably going to leave the AAPL calls open for now, but I'm not very comfortable with it because of where we are in the market (today's move) and because the intraday 1 min chart in AAPL is not confirming which would suggest (if the divergence migrate out to the longer timeframes) that this move is being sold in to which is the reason I expected it to be a quick move and therefore preferred calls/options.

The 5 min leading positive is where the accumulation of the lows moved to today, it is not indicative of the action on the way up (underlying action).
This 1 min leading negative divergence is indicative of underlying trade on the move up.

On one hand I think the 5 min is big enough that it should have some more upside, on the other, the 1 min chart didn't even try, it looks like immediate distribution.



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