This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

AAPL, BIDU: Fundamentals, Techincals and Options

Stocks in this article: AAPL BIDU

Take a look at the OP/T3 video with Jill and Scott. They review the tech sector over the past year and call out trades in two of my favorite names to trade. Let's tie in the fundamental and technicals from the video and check out some options strategies to play AAPL and BIDU.



Apple (AAPL - Get Report) fans and shareholders alike are still gleaming with pride after last week's earnings report. The company that always exceeds expectations peaked above analyst's highest estimates, and after the first day of profit taking, the stock had a swift resumption of its bullish trend. The Cupertino-based company is firing on all cylinders and maintains a strong buy rating for most investors as the outlook into 2012 remains strong.

Then politicians stepped in. The stock was drug down for a 3% hit after the QQQs broke through their most recent ascending channel on Wednesday and goes to show that even the strongest stocks are vulnerable here. We're one bad headline away from what could be some serious selling and funds know that. I'm not interested in attempting to time a move down, but I do want to look at levels we could step back in on the buy side in AAPL and options strategies that lend themselves to these potential moves. The first clear area we might find buyers would be $383.90. This is logical after the earnings gap but if this level gives way stand back until we get back to $365. By this time I would expect the market to be in bad shape as well. $365 would take us back to the stocks previous high made in January and we could then begin looking for a bounce.

One way to take advantage of panic selling with options is to step in on the sell side of the 380 or 385 puts as we move lower. If these contracts fall quickly they'll have an increase in volatility and selling these options could lead to a nice capture of premium if our first support level holds. You can set stops on these positions just like you would buying an options contract or you could have the stock assigned to you if you're looking to take part in a longer-term move.

AAPL Chart
Source: eSignal

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters