Although it dipped on Thursday, Apple (NASDAQ:AAPL) hit all-time highs Wednesday on the heels of it Q3 earnings report. Which begs the question as a trader, is this the time to buy? Certainly with the flurry of earnings, any trader will be looking for stocks to continue their moves after the earnings announcements are released. While stocks like AAPL have been moving higher in recent months, I’m not sure its latest move is an indication that it will have continued momentum to the upside. As an options trader, I often look for stocks that have opportunities to take advantage of momentum, and while many investors love to trade AAPL for the long-term gain (and it can certainly have days with big moves backed by momentum), I believe there is also an opportunity to trade AAPL with some short-term outlooks as well. This means that as an investor who may trade AAPL by purchasing shares when the stock dips — or even sell some covered calls to collect premium — you may want to buy sooner than later because I think AAPL will pull back before it resumes it highs.
As an options trader who likes to swing trade, what I'm most excited about is looking for the retracement to move Apple back to $150, then to buy the 150 call with an expiry of two weeks. I think that even though we saw Apple highs at 160 with nice volume on Wednesday, Thursday's move shows a different picture. Apple looked tired on Thursday with price continuing its move down, trading closer to 155 by day's end.
Bottom line? I'm looking for the price to pull back to 150 and then I'll buy calls, holding them until price resumes —its highs. I think patience is the game for now.