Description
AAPL has broken out of an Ascending Wedge to the downside following an ATH just over 182.
Ascending Wedges are at most intermediate in their trend implication and represent a general petering out of investment interest as the formation progresses and the stock becomes more expensive. Wedges typically take at least 3 weeks to form, otherwise they would be classified as a pennant. Also, prices usually travel 2/3 of the way through the formation. These are two technical facts we see here when using the bounce on 26NOV to 02DEC as the start of the pattern.
The resulting price move implied by the pattern is equal to at least an entire retracement of ground covered by the formation of the Ascending Wedge, to 156.75.
Using a Long Put combined with a Call Credit Spread here in lieu of a Put Debit Spread
The reason for this is to decrease the overall debit of the position, but also leave profit potential open to the downside in the case of a long or swift fall accompanied by a sharp increase in IV.
Long Put
Levels on Chart
Reevaluation: 177.5
PT : 159
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
2/4 40P
R/R & Breakevens vary on fill.
Manage Risk
Only invest what you are willing to lose
AAPL has broken out of an Ascending Wedge to the downside following an ATH just over 182.
Ascending Wedges are at most intermediate in their trend implication and represent a general petering out of investment interest as the formation progresses and the stock becomes more expensive. Wedges typically take at least 3 weeks to form, otherwise they would be classified as a pennant. Also, prices usually travel 2/3 of the way through the formation. These are two technical facts we see here when using the bounce on 26NOV to 02DEC as the start of the pattern.
The resulting price move implied by the pattern is equal to at least an entire retracement of ground covered by the formation of the Ascending Wedge, to 156.75.
Using a Long Put combined with a Call Credit Spread here in lieu of a Put Debit Spread
The reason for this is to decrease the overall debit of the position, but also leave profit potential open to the downside in the case of a long or swift fall accompanied by a sharp increase in IV.
Long Put
Levels on Chart
Reevaluation: 177.5
PT : 159
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
2/4 40P
R/R & Breakevens vary on fill.
Manage Risk
Only invest what you are willing to lose
Comment:
It looks like tomorrow may provide a better entry.
Comment:
Fix on the Trade:
The Trade
BUY
1/28 170P
1/28 177.5C
SELL
1/28 170C
The Trade
BUY
1/28 170P
1/28 177.5C
SELL
1/28 170C
Trade active:
Went with a tighter Credit Spread due to the cheaper option we had today.
Bought the 1/28 175C instead of the 1/28 177.5C.
Filled @ 1.05.
Bought the 1/28 175C instead of the 1/28 177.5C.
Filled @ 1.05.
Trade closed manually:
Filled @ 2.6, +148%.