Seven of the ten major economic sectors ended yesterday’s session with gains. However the financial, energy, and materials sectors are finishing in the red.

Apple Inc. on Wednesday after market, reported a second-quarter profit that rose 36% from a year ago as revenue climbed above $7 billion on strong sales of Macintosh PCs and iPhones.

Despite positive results, its shares slipped about 1% in after-hours trading as the company gave investors a bit of concern with a third-quarter forecast that was conservative and fell below analysts’ consensus averages.

This is another typical example of options trading traps on earnings play. Stop immediately if you are still gambling on earnings gapping. How much more blood can you bleed? Be a smarter trader.

The market has be trading sideways for the past two days as investors are staying at the sidelines waiting for more news on earnings. Will this reaction on AAPL continue when the market open today and drive the market down further? We’ll have to wait to find out whether the fear will increase as the VIX is testing its second support at 20.

Following up on my pervious post on the bearish sentiments on the financial sector, AIG has slide from $48 t0 $44, down by $4.00.

I bought 4 contracts of June 50 Put @ $4.65, now only 2 days later it has increase to $7.20, an unrealized profit of $1020.00 or ROI of 54.8%.

aig2.jpg

Looking at AIG chart it has touch the first support, if the market opens on a bearish note today, there is a possibility that it will drive AIG to the second level of support which is at $39 another $5.00 to go with a delta of -0.7 which means that 5 x 0.7 x 400 = $1400 profit if it fall to the second level of support.

As I am always neutral and will not predict its direction as chart reading can only provide me with an edge of higher probability, I set the stop at $6.30 which is likely to be triggered and fill at $6.20. I am giving another $1.00 room to allow for some daily noises and at the same time protecting the majority of my profits.
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As for JPM, it moves in accordance with the market traveling sideways for the past two days. Since there is no clear indication to which direction it is heading, nothing is done. However a stop is place on a conditional order if JPM stock’s price > $47.10, which is likely to be bullish then.

jpm2.jpg

If it is not trigger then it is going down as this stock will not sit tight due to the uncertainties of the financial sector. Sticking to your trading plan is important, flicker mindedness can cause you to lose money in your trading. Stay with your course.

“The greater the uncertainty, the more people are influenced by the market trends; and the greater the influence of trend following speculation, the more uncertain the situation becomes” - George Soros

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