How would you play AAPL

As most of you know (and if you don’t, and you are a trader, you are slacking) Apple broke out to knew highs on significant volume after earnings. The question now is, how do we play this brekaout?

The stock was over $100 in after hours when it reported Wednesday night, but failed to hold this major round number Thursday *and* closed at the day’s lows. These are not good signs. However, Friday the stock held gap support, which is is a positive for bulls. Breakouts to highs off of a cup and handle formation (which AAPL did) can lead to powerful upswings, which is another positive for this stock.

I might be willing to take a small nibble under $100, but I won’t increase position size until we see some more clear signs of strength. If the stock can not hold support, I would expect it to fall back to the 50 day moving average and may initiate a short position.

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