Apple Trade Redo

The Mis-trade

Some time ago I told my readers I would buy an Apple put based on a technical reversal and overall weakness in the stock. That trade went sour. I bought too early before I had confirmation on the charts. As a result the stock went 3 points higher and squeezed me out of my put. I can only take so much pain. I took my loss and moved on.

Today I looked at the chart and I noticed the RSI had become flat and later turned downwards. I jumped on it and immediately purchased some puts.

This is what I should have waited for. I underestimated the momentum retail investor in Apple stock the first time. This time, I pounced after confirmation.  I fully expect another short-trading opportunity in the next few days.  I believe this guy is headed back towards its last support (around $101).

The Trade

I traded the July 105 Puts (QAASA)

• 9:42amEST – Purchased QAASA @ 4.20/c0ntract
• 11:07am EST – Sold QAASA @ 5.20/contract
• Profit = $100/contract in 1hr 25mins

This is the trade I should have had last time.

The lesson here is to be patient and allow the chart to develop.