1:05pm (EST)
We had two prediction this week for the market: 1) Apple could trade to $550 over the near-term and 2) the Nasdaq could clear 4,000. We aren’t there yet but we are getting close.
Shares of Apple (AAPL, $527.72, down $4.19) are slightly lower today but they have put in a good week after closing last Friday a shade under $509. The stock tripped $533 this morning but is currently down 1%.
Our chart work from the Weekly Wrap and Monday morning outlook has been showing a surge to $550 could be in the works following the formation of 2 “golden crosses” we highlighted. We said a move past $500 could be powerful and despite today’s pullback we still believe $550 triggers.
The Apple November 550 calls (AAPL131116C00550000, $10.00 down $0.40) opened Monday’s session at $4.75 and closed yesterday session at $10.40. Today, they reached $11 before the pullback and are still a double at current levels.
The “golden crosses” were a great signal to go long and we would imagine the talking heads will be peaking at our charts. We were a little early on a weekly Apple trade earlier this month and if we were in this trade we would have a decision to make.
The company announces earnings on Monday, after the close, and shares are poised to move $10 or more. At current levels, Apple could trade north of $575 or south of $475 in after-hours and into Tuesday’s session.
The wise move would be to close half the trade for a 100% win and let the rest ride on a bullish push past $550. It would be easier to rest over the weekend knowing you would be playing with the house’s money and it would be a risk-free trade.
While we weren’t in this trade, we have also put in a sweet week as we have closed a number of profitable option trades for gains of 138%, 85%, 50% and 13%.
The market is still up as we head to press but was close to slipping into the red. The Dow is up 28 points to 15,537 while the S&P 500 is advancing 3 points to 1,755. The Nasdaq is higher by 8 points to 3,937 and the Russell 2000 is gaining 3 points to 1,115.
We also have another Profit Alert on a trade that banked us 50% and a New Trade! We normally don’t open new positions on Friday’s but we are expecting an explosive move in the market over the next 2 weeks to continued new highs – if current support levels hold.
We will have to check the charts over the weekend to reaffirm our stance but that is what we are seeing despite the million of market calls for a massive pullback of 10% or a correction of 15%-20%. The suit-and-ties have been wrong all year long and while there will be a pullback at some point they just might have to wait.
We will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. We will be watching the market into the close like we always do and we could also have a New Trade for the Weekly Wrap before we roll so stay locked-and-loaded. If not, we will see you then and have a great weekend everyone!