NEW DIRECTIONAL CALL PLAYS

Apple Inc. - AAPL - close: 332.24 change: +0.20

Stop Loss: 317.45
Target(s): 337.50, 347.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Everyone loves AAPL but the stock has been subjected to some profit taking this week. I suspect that support at $330 will break this time around. However, there is a strong chance that AAPL will bounce from technical support at its 200-dma, which is quickly approaching the $325 area. It's an aggressive trade, given the short-term down trend, but I'm suggesting we buy calls on a dip at $325.00. This will be close to the 200-dma and relatively close to AAPL's long-term trendline of higher lows. The April low was near $320 so I'm setting our stop loss at $317.45 just in case AAPL does see a spike toward the $320 area. I will repeat that this is an aggressive trade. AAPL can be volatile and the options aren't cheap. Let's keep our position size small to limit our risk. We have two targets at $337.50 and $347.50.

Trigger @ $325.00 (SMALL POSITIONS)

- Suggested Positions -

buy the July $340 call (AAPL1116G340)

Annotated Chart:

Weekly Chart:

Entry on June xxth at $ xx.xx
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 12.9 million
Listed on June 8th, 2011