DaytradeTeam Brainzzzz

Sometimes the simplest reasons for a trade are the most profitable. Our Directional Puts and Calls Options Trading System signaled an option trade when we spotted a strong uptrend pattern in AAPL.

An uptrend is defined as a continued pattern of higher highs and higher lows in a stock price chart. This is exactly what we saw when we signaled the DaytradeTeam members to buy the Jan06 55 AAPL calls for $4.40 per contract on Oct 5th, 2005.

Let’s take a look at the chart of AAPL:

As you can see, when we entered the trade (first yellow circle) there was a strong uptrend in progress. About a week later, AAPL released disappointing earnings.

Our nerves were tested as the stock dropped several points on the bad news. We knew, however, that a strong uptrend is often more powerful than a simple earnings release, so we held and advised our members to do the same on this option trade.

In fact, if you've been a reader of the DaytradeTeam Stock Trading Blog for long, you will recall that we also posted an alert to you that AAPL's earnings gap down might be a solid opportunity to get in cheap!

Within days the uptrend pattern was resumed and AAPL was on its way back up the chart to new highs.

After a strong push on Nov 2nd, we found AAPL at the top of its uptrend channel—a great place to take profits. DaytradeTeam then issued a sell signal to its members and the average exit price was $7.50 per contract—a nice 70% gain in less than a month.