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Catching the Bounce on AAPL     

AAPL has been sliding lower and lower since September 2012.  But, it does seem like it has finally turned the corner.  AAPL was up more than $10 on Friday.  Today, in a down market, AAPL added another $12.06, or +2.72%.  We have been watching and trading AAPL calls for more than a week now.  On Friday, we cashed out a +100% trade on AAPL 450 calls:

10:18 | Ecstatic Plays AAPL ($443.90) Sold to Close 0322C450 Mar 450 calls, at $5.00 +100%

Today, we did another quick trade for an intraday gain of +38%
11:39 | Ecstatic Plays AAPL ($455.25) Sold to Close 0328C460 Mar 460 calls, at $7.60 +38%

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Yes, if we had kept those 450 calls on Friday, we would have made even more.  But, given that the markets were slipping, we were being careful and were not sure whether AAPL could continue to run 2 days in a row, especially if the broader market pulls back.  This morning, everything gapped lower.  But, buyers came in immediately.  AAPL was particularly strong as investors speculated on a higher dividend.  The broader market did end lower, but, AAPL helped to keep SPX above 1550.

In the Trading Room, I have been saying that AAPL is working hard to establish the bottom and trying to turn up.  Here's the chart:

As you can see, buyers came in to buy between $420 and $440, and established a base.  On Thursday last week, the 10-day MA (the red line) began to turn up.  This was a cue that AAPL was ready to turn higher.  You can also see that the 20-day (cyan line) and 30-day (black line) MAs were flattening out.  The MACD also had a bullish crossover.  These were all signs that big buyers were ready to come in.

I think on this run, AAPL should at least test $480.  But, it is hard to say if it will continue higher right away.  $460 could see some resistance.  Of course, if AAPL does announce a dividend increase, it won't be hard to see AAPL jump above $500 to close the gap from recent earnings!

Good night and HappyTrading! ™

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