Big Money Breakdown: Apple

Yesterday, I told you about the big money flowing into Apple Inc. (Nasdaq:AAPL).

And over the course of the day, that big money flow just got bigger. In fact, we saw almost one million contracts of AAPL calls expiring Friday trade in a single day.

It’s an understatement to say I was freaking out when I saw this yesterday afternoon:

Click To Enlarge

This is unprecedented. And clearly, something’s going on. Something big. AAPL could be off to the races, all the way to $155. I’m looking at the August 20 $152.50 calls as a play on AAPL turning around.

But don’t just jump into this trade willy-nilly. AAPL opened in the red this morning, and I want to see shares turn green on the day before buying this call.

Now, remember, we already have an AAPL call in the Profit Takeover portfolio – the September 10 $150 call. That position is deep in profit – and this bullish activity in AAPL will boost it even higher.

The moment it’s time to take our money and run, I’ll send an alert to both your email and your phone – as long as you’re signed up for Profit Takeover text alerts.

If you aren’t, just click here now to sign up and be the first to receive your AAPL call exit instructions.

But AAPL isn’t the only stock I’m watching. This retail giant reports earnings tomorrow, and there’s only one direction the stock can go…

How to Play Target’s Earnings

Retail giant Target Corp. (NYSE:TGT) reports earnings before market open tomorrow – and it’s in line for an Amazon-style sell off.

Look – TGT has been on an incredible run for the past several months. Since the beginning of March, it’s risen more than 38%:

TGT March-present

TGT’s last earnings report was on May 19. The day before that report, the stock sat at $206. Today, it opened at $258 for a 25% rally in between earnings dates.

There’s no way that TGT can meet the market’s expectations on this report. It’s risen too high – and right now, it’s a recipe for a fade.

Even if earnings are great, TGT likely won’t continue on this rocketship higher. It’s a story we’ve seen time and time again.

Look at Inc. (Nasdaq:AMZN). Since reporting earnings on July 29 – earnings that beat analyst estimates by more than 20%, mind you – AMZN has fallen over 9%.

And TGT is set for a similar fate.

So – how do you play it?

Well, that’s exactly what I’m showing you today…

As I said, TGT’s earnings are a recipe for a fade. It doesn’t matter if the report is good or bad – I don’t think this retail juggernaut can stay above water.

You can fade the stock with a put or a put spread. Both strategies will allow you to profit on the downside – but I wouldn’t go too far out, because long-term, TGT will rise again.

Yesterday, the Biden admin announced a permanent boost to food stamp benefits in the biggest increase in history. And it’s a move that’s going to help a ton of grocery stores, including TGT.

So, post-earnings, when TGT takes an inevitable fall, I’d look to buy the dip, adding TGT to my stock portfolio for a longer-term hold.

Double the Gurus, Double the Trades

On Thursday, August 19 at 3:30 PM I’m going live to trade the close for Profit Takeover members like you.

But I’m not doing it alone.

I’m going to be joined by Kenny Glick, otherwise known as the Warlock, or the VWAP king.

While I break down the market’s volatility, Kenny will explore the VWAP (Volume Weighted Average Price), his own top indicator.

And in the 30 minutes before and after the close, we’re going to show you the best trades – for both Thursday and Friday.

It’s all going down right here. Be sure to add it to your calendar now so you don’t miss a beat.

Mark’s Watchlist

  1. Utilities Select Sector SPDR Fund (NYSEARCA:XLU)

XLU is an ETF made up of utilities stocks like NextEra Energy Inc. (NYSE:NEE), Duke Energy Corp. (NYSE:DUK), and Southern Co. (NYSE:SO). And it caught my eye because of its inexpensive IV.

Remember – when IV is cheap, you want to be an options buyer. The September $70 calls are only about $0.70 – that’s just 1% of the value of the entire stock. And it’s a great, cheap way to play some upside movement for the next 30 days.

  1. Walmart Inc. (NYSE:WMT)

Like TGT, WMT is another grocery chain that stands to benefit from the Biden administration’s food stamp expansion. Known for even more affordable prices than TGT, WMT could ride the long-term wave higher on this move.

  1. Albertsons Companies Inc. (NYSE:ACI)

My favorite beneficiary of the food stamp legislation, however, is ACI. The grocery company is the second-largest supermarket chain in North America, after all. And we’ve already seen the stock break out. Since the end of July, ACI is up 38%.

I’m looking at the October 15 $30 calls for $1.50 or less as ACI looks to hit a new 52-week high.

VIX Traffic Light

Not much has changed since yesterday when it comes to volatility.

The VIX futures curve is still in a nice contango, and contracts are still sky high, keeping the market afloat.

So again today, our traffic light is red – meaning volatility should continue to go down while the broader market goes up.

Want to see me break down volatility – and the top volatility trades – live? Then click here to add this week’s live trading event to your calendar now.

Until tomorrow,

Mark Sebastian


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