I was in this when the earnings came out although in a hedged kind of position (as follows)
bought x shares for 425
bought x 450 2013 puts for 63
Apple came out with earnings that blew expectations and I immediately got rid of the entire position for some profit as follows:
sold x shares for 452
sold x 450 2013 puts for 52
As you see, made a good profit in one night. But I had this nagging feeling that Apple is going to go higher, way higher. I grappled with what to do that night...should I just get out of Put and let it run. However, had this feeling that it may pullback before going higher.
Now, today Apple is at 487 and it looks like it will test that 500 before pulling back! As expected it did pull back to 440 (but was hoping for it to pull back to 420ish to enter). The graph looked expensive, overbought. Well, if you look at graph now, it's way overbought. There in lies the dilemma!!
However, there was something I should mention...I was reading the latest FORTUNE magzine edition and in it there was an article on Momentum investing. And this top hedge fund guy (forgot the name) was mentioning how when the news comes on Mo stocks, usaually they don't move all the 100% of their move, rather they move 50% of their potential on the news breakout and then over the next few sessions will slowly climb to realise their 100% potential. I read it, but I didn't connect the dots w/ the Apple earnings and move. How true he was!! If only I got in back on this one when it crossed $460. 420-460 was immediate earnings related move and the next 50% move seems to be from 460-500!!
So I'm sure Apple will climb to 500, but just afraid that it's too late to get in at this time, but will wait for it's eventual pullback to test the moving average :(
bought x shares for 425
bought x 450 2013 puts for 63
Apple came out with earnings that blew expectations and I immediately got rid of the entire position for some profit as follows:
sold x shares for 452
sold x 450 2013 puts for 52
As you see, made a good profit in one night. But I had this nagging feeling that Apple is going to go higher, way higher. I grappled with what to do that night...should I just get out of Put and let it run. However, had this feeling that it may pullback before going higher.
Now, today Apple is at 487 and it looks like it will test that 500 before pulling back! As expected it did pull back to 440 (but was hoping for it to pull back to 420ish to enter). The graph looked expensive, overbought. Well, if you look at graph now, it's way overbought. There in lies the dilemma!!
However, there was something I should mention...I was reading the latest FORTUNE magzine edition and in it there was an article on Momentum investing. And this top hedge fund guy (forgot the name) was mentioning how when the news comes on Mo stocks, usaually they don't move all the 100% of their move, rather they move 50% of their potential on the news breakout and then over the next few sessions will slowly climb to realise their 100% potential. I read it, but I didn't connect the dots w/ the Apple earnings and move. How true he was!! If only I got in back on this one when it crossed $460. 420-460 was immediate earnings related move and the next 50% move seems to be from 460-500!!
So I'm sure Apple will climb to 500, but just afraid that it's too late to get in at this time, but will wait for it's eventual pullback to test the moving average :(
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