I’m not invested in Apple (AAPL) again yet, but I’m starting to watch it again. The AAPL chart is interesting and will be telling within the next couple of days. You can see on the chart I’ve attached that AAPL just broke its downward trending line of lower highs, that’s bullish, but is bumping up against the line that has used to be a ceiling and then became a floor, that’s the possible short-term bearish view. If it breaks through this current line, around 129, and closes above it, AAPL could be ready to run again.
The options are showing high volatility, which has been the case with AAPL for a while. I don’t think AAPL options volatility will spike in the near term much more than the current level which makes selling options a little safer. The real risk is in price movement. The chart shows likely support around 120 if it falls again and could make the 120 strike a good move right now for naked puts around $3.00 for September and $5.60 for October. The high volatility gives an extra cushion with high premiums for the puts and even higher premiums for calls. If assigned on a naked put, the covered calls would provide a deeper cushion to lessen the damage or better yet increase your profit.
That’s how I played it a few months ago when I sold my naked put, was assigned and re-wrote calls out-of-the-money (OTM) to make a really good percentage and dollar gain. I could have made more if I held on to the stock and not sold a covered call, but was happy to get out with such a strong profit. Depending on how AAPL reacts to this flat line around 129 will determine if I get in on it again.
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