Friday, August 6, 2010

AAPL: The Frustration Builds......

Will AAPL trade at $260 forever?

I keep reading more and more people playing these rolling pin plays, week after week, against AAPL, and they will keep doing it until it stops working. How does it work? Pretty simple. On Thursday or Friday of each week, maybe even late Wednesday for the sell, you short the front-week AAPL calls and/or puts, then buy the corresponding strikes expiring the following week. A mini calendar spread. When the front week expires, sell the long positions, and wait to repeat. I actually think this is going to catch traders off guard in a harsh way the first week it doesn't work, as the more it works, the more aggressive traders will become. Rather than shorting one and buying one, some will start to short two and buy one, then maybe short three and buy one. Why not? The stock is pinned down and not going anywhere, right? Judging by the technicals (am forced to, given that so many believe that garbage that it is self-fulfilling) and especially the fundamentals I follow, I don't think this $260 area is home for AAPL much longer at all.......But the pin artists won again today........

long, very long AAPL