Wednesday, December 09, 2015

AAPL Update #51

AAPL and the markets dropped today. December is looking like there might not be much of a year end rally. AAPL closed down over 2pts finishing at 115.62. The short call at 116 is actually now OTM!

The last few weeks have been one of up and down with AAPL moving in a range from around 115 - 119. This price action is working off areas of supply and demand above and below this range. How this price action ultimately resolves itself remains to be seen.

At the top end, there is still an un-tested daily supply zone from 120.56-121.79

At the bottom end, the original daily demand area I am watching is from 114.89-113.32. There has one test of daily pivots into this 113-115 area. And it looks like it is close to getting tested again.

This is going to eat up any demand in this area and price could very well continue to fall through.

AAPL has also been unable to significantly move to the upside in any sustained manner. There have been swings up followed by swings down. Nothing sustained.

I am tempted to make another adjustment downward capturing a little profit by rolling down the short call. However, in looking at the chart price action I am going to wait until there is a bit more resolution to this trading range.

There is a 110 put expiring this week and the short call at 116 in 30d. The risk in the position is contained with a hedge of 55 delta. If the price continues to move downward this week and breaks below 113 I will look at another adjustment of probably rolling down the call for some credit and to maintain the hedge.

I will wait until this price action resolves itself significantly. This might happen in the next few days.

No comments :