Hi-Tech Profits!

By: Jeff Neal | Mon, Dec 21, 2009
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12/20/2009 10:54:57 PM

Trading Approach

Identifying fundamentally stellar stocks poised technically to breakout for big profits.

Company Description

Apple Incorporated (AAPL) designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative customers.

Fundamental Picture

Apple has stellar fundamentals led by terrific sales growth, strong earnings momentum and very impressive return on equity.

Technical Outlook

Apple has a nice long-term uptrend in place, which is being confirmed by the up trending On Balance Volume indicator (OBV). Couple this with the strong fundamentals makes Apple an attractive trade opportunity.

Trading Action Plan for the Week

Stock Entry: Buy shares of Apple (AAPL) at 195 or better.

Option Entry: Buy the April 190 call (APVDR) at 18.50 or better.

Profit Target Exit: 240.50.

Please note that we will use this price as an initial guide but we will gradually move up our trailing stop to realize as much of the breakout as possible while protecting our profits.

Stop-loss Exit: 180.40.

As the stock starts to breakout we will move the trailing stop up to protect any accrued profits.

Review of Open Positions

Trade Date Symbol Trade Trade Comments
11-23-09 HIG Long the stock at 25.16 and long the January 25 call at 1.60. Keep the profit target at 41 and keep the stop at 23.
12-14-09 CR Long the stock at 30 and long the January 25 call at 5.20. Keep the profit target at 38.10 and keep the stop-loss at 27.70.
12-07-07 DECK Long the stock at 97.84 and long the January 95 call at 6.60. Our trailing stop was hit. Sold the stock at 99.20 and sold the option at 7.50 for solid short-term profits on both.

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Jeff Neal

Author: Jeff Neal

Jeff Neal

Jeff Neal

Jeff Neal has been actively and successfully trading the markets since 1996. He holds an MBA in Finance from the University of Indianapolis and a bachelor's degree in Computer Science from Indiana University. Jeff is a veteran trader consistently posting profits by strategically applying options to the stock and ETF markets. As an expert risk manager Jeff combines technical analysis, fundamental analysis and options to create an optimal risk to reward profile. Jeff has been a longtime trading mentor and a prolific writer that has had many articles published. He is an author having featured articles in Futures magazine and Stocks and Commodities magazine. Over the years Jeff has interviewed many of the top traders in the business discussing the secrets of their trading success. In addition to his trading and writing experience, he also was a radio show market correspondent discussing the best stocks and options for the week. Jeff is passionate about trading the markets and as a mentor he constantly emphasizes that concentrating on risk management has been the cornerstone of his trading success.

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