DailyPlay – Opening Trade (AAPL) – July 25, 2022

Bearish Opening Trade Signal

View AAPL Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 3 Contracts Aug 26, 2022 $155/$165 Call Verticals @ $3.91 Credit.

Total Risk: This trade has a max risk of $1,827 (3 Contracts x $609 per contract).

Counter Trend Signal: This is a Bearish trade on a stock that is experiencing a bullish trend.

1M/6M Trends: Bullish/Neutral

Technical Score: 8/10

OptionsPlay Score: 106

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Please note these prices are based on the previous day’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. This will be reflected in the Portfolio tab within the OptionsPlay platform.

Investment Rationale

It is now time to short AAPL as we are going into earnings next week. When we look at the long-term chart of AAPL, we see a channel wherein AAPL was trading higher over the last few years. As this trend-line has been broken to the downside, we are seeing a retest of this channel. The risk/reward favors the downside as we are going into earnings. On the long-term chart, we can also see a head-and-shoulders formation. Looking at the Daily chart, we see that APPL has approached a shorter time-frame resistance level as well.

AAPL Daily