Apple Inc. Trade Of The Year Happening Right Now
Billionaires Portfolio: If you ever wanted to buy Apple Inc. (NASDAQ:AAPL) or own Apple now is the time to buy or add to your position. Technically Apple has the best short term bullish trading set up I have seen all year.
Apple today just bounced off the psychological $500 round number level, actively traded stocks always find support or resistance at round numbers, because there is a lot of trading activity that occurs at round numbers.
Secondly the $500 level is the exact price that Apple broke out of in late October and as most chart watchers know previous resistance become support, so another reason why Apple should hold at the $500 level.
Furthermore If Apple can hold above the $500 price today it is a very strong bullish reversal signal, and it also creates a great trading setup.
Today or on Monday morning you can put a stop in $10 below Apple’s current price at $490.50, if Apple holds above $500 today then I believe there is a greater than 90% chance it will go up to fill the gap at $550, as 90% of actively traded stocks fill back there gaps. That means you can risk $10.00 to make $50 or a 5 to 1 risk reward if Apple closes above $500 today. Moreover that also means you should take profits or put a limit order in at $550 as well, in order to achieve the 5 to 1 risk reward trade.
For aggressive traders you can buy a $500 February Apple Call Option, or mini apple call option (remember a mini option is much cheaper and gives you the right to hold 10 shares of Apple’s stock not a 100).
Either way if you buy the stock or buy a February Apple call option, the risk/reward of being long Apple here at $500, is just too good to miss.
Furthermore, Billionaire Carl Icahn just spent $500 Million of his own money purchasing apple stock at or around $500 as well, and its hard to second guess a man who is averaged 27% a year for over 51 years and is worth $20 Billion today.
Please don’t miss the opportunity to learn more about me and how we follow Billionaire Investors into stocks by visiting the Billionaires Portfolio.
William Meade is the President of Pure Alpha Research, a hedge fund consulting and investment research firm. He is the former Director of Research at Zacks Investment Research in Chicago. Before that, he was the lead analyst at a top performing $1.2 Billion dollar institutional investment firm and hedge fund. Mr. Meade has a Masters in Applied Economics from The Johns Hopkins University. Learn more about William Meade and how he follows Billionaire Investors into stocks by visiting the Billionaires Portfolio.
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