Apple stock closed at a record high today. It will be interesting to see where the stock peeks before dropping back down and settling within a short term range. Again, with Steve Jobs out and his succession plan being executed the sky is the limit for this stock. Right now there is virtually no downward pressure. This leads me to believe, however, that the company will be hitting a short term high very shortly, and will trade in a small range between $370 and $415 till earnings are announced in October, at which point the stock should break out of that pattern.
The reason for this being that typically whenever things are this bullish on a stock, it is a signal that it is about to hit a maximum, and take a small dip. I wouldn’t be surprised to see some rumors come in suggesting production delays on the iPhone 5, or production constraints. Still over the long term I am very bullish on the stock and would say a safe play would be to sell $370 or $380 put options, depending on what risk you are comfortable with, you might turn this into an iron condor, and sell $440 call options, and hedge with a call option at the $445 level, and put at the $365 level.
A pattern with this stock is to buy on the rumor and sell on the news, expect to see some profit taking in early to mid October once the iPhone 5 release date is announced. That would be a good time to buy.