Made Money from two Apples, 134 and 52 Percent Profit

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Oct 05 2007
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There’re thousands of stocks listed on the Wall Street and unless you’re one of the multinational fund managers who have literally an army of researchers or analysts who can input you with information at a click of a mouse, it’s not possible for you to cover every corner of the stocks. Even fund managers only concentrate on some of the most promising stocks with great fundamentals.

Frankly in the U.S. stock markets you’re looking for more than normal fundamental stocks. You should position yourself to be in another level searching for innovative companies that can continuous creating values for shareholders. Competition is tough and only the best company can survives in the cruel world of “only the best will not be wiped out”. Readers who have been with FinanceTwitter long enough knows that there’re only a handful of favorite stocks that I keep trading or investing.

Apple Inc. (Nasdaq: AAPL, stock), one of my favorites was mentioned repetitively within this blog simply because it had and hopefully will continue to make money for me. If you still remember, I mentioned about Apple Inc. and Google Inc. yesterday (read here) and how I decided to let my profit run since I want to take profit only at the border of resistance which was at $160 and $600 respectively. Guess what, Apple Inc. was nearing the $160 level at 11:20 am trading time and I decided to lock-in the profit.
FinanceTwitter Apple ProfitYesterday I mentioned that I had 2 positions – AAPL Oct 135 Call Option and AAPL Oct 140 Call Option. I closed both positions before noon since the market has been kind enough to be in the green today. Furthermore I only have 2-weeks before the Oct-expiration. What better things to do than make money and run while the positions have met the profit target? I’m still letting my GOOG Nov 570 Call Option survives on its own at this moment.

Okay, first thing first, AAPL Oct 140 Call Option position was opened back in 24th July 2007 before the earnings announcement. Apple Inc.’s fiscal third-quarter profit soared more than 73 percent and it sold 270,000 iPhones in the first two days on the market. Everyone was jumping in celebration and sent Apple stock up by more than 9 percent or $12.92 in extended trading hour. However I didn’t close my position as the result was simply fantastic and there should be some follow-through. But the global market didn’t think so, first when Dow Jones plunged by 300 points then followed by subprime crisis and the rest was history. Apple went on to breach the support of $132 and even $125. I was saved once again as I bought the option call with tons of time-value, the main ingredient in option trading.
Apple 52 Percent Profit ChartAnother reason why I bought Oct Call Option was because Apple will be reporting its’ next earnings before the expiration and so the stock should recover nicely by then. Looking at the chart above you can see how it plunged and took more than a month to recovers and once it was trading above $140, that’s when the rock and roll started. For this contract I only made 52 percent profit, not something that I’m proud with considering that it’s been floating for more than 2 months. Anyway it’s still profit nevertheless.

The second contract on AAPL Oct 135 Call Option was entered because of the price-volume which signal a possible breakout from the $140 resistance level. And when it closed on 18th Sept 2007 above $140, Apple was on its way to rock and roll together with my earlier position above. And within 16-days of trading, I made 134 percent profit, better than the position discussed above.
Apple 134 Percent Profit ChartLooking at the chart above, you can see how Apple consistently and confidently traded above $140 and $148 before it stopped at the new resistance of $160. Seriously, the pressure is on Steve Jobs’ shoulders to continue deliver another set of mind-boggling result in days to come. I wish I can say Apple will have no problem at all delivering yet another set of great earnings in October. Considering the stock price of Apple is now hovering at $160 level, Apple Inc. is not cheap. Given chance I would whisper to Steve Jobs and tell him to announce “stock-split”. That would give the much needed catalyst to push the stock price again. So, will there be a stock-split announcement from Steve? Most probably, I hope.

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Jobs has made that clear.

yeah steev … i know that but still you never know what Jobs’ surprises are … there might be no stock-split but i still hopeful 🙂

cheers …

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