Grabbing an Apple Long

Is this it for Apple (AAPL)? Is the bottom in? That's the thing about bottoms: You won't ever know when they are actually in until well after the fact. But, for now, I'd say I much prefer playing the upside in this stock.

Apple (AAPL) -- Daily Source: View Chart » View in New Window »

Apple came close to the bearish cup-and-handle pattern on the daily chart, but it never quite got there. The reversal off the earnings trading is key here. Although it's tough to say whether the ultimate short-term bottom for Apple has been hit, I do think a run to the $440-to-$450 area is now more likely than a return to $400. With this thesis, my approach is to use a risk-reversal, selling the May 17 $400-or-below put (I used the $395) and buying an upside out-of-the-money call spread. In this case, I went with the May 17 $435-$450 call spread....236 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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