Apple (NASDAQ AAPL) is surging this week, but then again, Pick your asset stocks, commodities, bonds. They are all heading northbound. Election fears are proved overblown, and traders are back to the business of buying stuff. In turn, AAPL stock is one of the benefits, and it is high time we are taking a fresh look at the chart to see which price levels are worth trading around. If this is your first rodeo, there is one of the lessons to be learned regarding how the CBOE Volatility Index (VIX) behaved around the election. It has heightened fear and uncertainty, exacerbated by a rug-pull in stocks in late October and drove the VIX above 40. Such spikes are rare and signal strength is demanding for market hedges and protection. In the past, these circumstances are usually giving way to a market rebound and it is making sense. After all, panic and capitulation are transpired near bottoms and it is not tops.
AAPL Stock Charts
- As exciting as this week’s run has been, the truth is AAPL stock is lagging some of its tech brethren. Alphabet (NASDAQ: GOOGL, GOOG), Facebook (NASDAQ: FB), and Microsoft (NASDAQ: MSFT) all boast better-looking trends right now.
- Nonetheless, AAPL has pushed back to the high side of its 50-day moving average. That is placing it one step closer to restoring a healthy uptrend.
- However, what is needed before bulls press their bets is a rise above the resistance pivot of $125. Until then, the chart is looking more neutral than anything.
How to Trade Apple Now?
- With the worst-case, post-election scenarios now off the table, we can see wading back into the waters with a neutral to bullish-leaning Apple trade. The low-implied volatility has increased the appeal of bull call diagonal spreads.
- The strategy is consisting of buying a longer-term, in-the-money call option while selling a short-term, out-of-the-money call. Sometimes, it is being referred to as a poor boy’s covered call, this particular spread will yield a profit if AAPL stock is moving higher, sideways, or even slightly lower over the coming month.
- That said, to minimize the damage if sellers are returning, consider using the support level at $107.32 as your stop loss.
- The Trade: Buy the Feb. $115 call and sell the Dec. $125 call for a net debit of around $7.90.
- Apple ( NASDAQ: AAPL) is shooting for a profit of $2 to $3 per spread.
If you want to buy this stock, you can learn more information like cash flow at https://www.webull.com/cash-flow/nasdaq-aapl.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.