Buy Alert: May 1, 2015

Marcus Haber | May 1, 2015

Buy Alert: May 1, 2015

Trade Details

Buy Apple (AAPL) June 19^th 135 Calls for $1.60 or better (lower)

Why?

Is it possible that the biggest company of them all is undervalued? In fact, AAPL has sold off sharply this past week despite posting excellent earnings results. Some analysts are concerned about how well the Apple Watch will sell, especially since there have been some rollout issues. Let me ask you this – since when has an Apple product ever failed to meet expectations?

We’re going to buy June calls. Conservative investors can take profits at $130. Aggressive investors can hold up to $135. Yes, those exit points assume AAPL will hit them prior to expiration, when there’s still plenty of time value in the options. I may alter those points if the stock trades sideways as we approach expiration… however I doubt that will be the case. For risk control, conservative traders should exit at $120, while more aggressive traders can hold down to $115.