Apple is viewed as safe tech despite weak AI; short-term bullish on a potential gamma squeeze pop to new highs near $340.

But Don, I'm curious about your last one here. We've got Apple. We've had a lot of optimism about these new product launches, uh, their moves they're making in terms of AI. They're higher on the session here.

Year to date, they're up 21%. How would you approach Apple for trading right now?

Yeah, you know, Apple happens to be just, we can get into the fundamentals a little bit. It's a cash cow. Uh, I don't think I'm too impressed with some of the new products out.

I mean nothing comes close to like a chat GPT or a claude, right?

So uh at that point I I think Apple is much more if you will it's safety in tech. It's the Walmart now of technology. I'm sure Apple would be disgusted to hear that but it's become the Walmart, you know, of technology. That's really what it is.

And uh to that effect, I'm looking at kind of an unusual trade. This one's it's it's much more about the approaching, if you will, of all-time highs. And I think that if Apple creeps up just a little bit further, it gets maybe to this like 340 range, it'll actually squeeze higher.

Retail trade right now loves loves to trade into highs. Okay, we've seen it again and again in many of the tech stocks uh especially recently. And what I'm talking about is a gamma squeeze.

And that is ultimately if Apple starts creeping up, it gets to the the 338, if it gets to 340, retail is going to come rushing in, they're going to buy calls. Now, as retail starts to buy calls, it's actually causing market making firms to sell them the calls and turn around.

And the market makers, okay, are then buying stock, which actually forces this into a feedback loop. Before you know it, the stock could be 5, $10 higher, okay? And that's again, it's what we call a gamma squeeze.

Now, for that trade to occur, yeah, we got to creep up a little bit further, but I'm actually going to take a fairly short-term horizon because, as I said just a few minutes ago, I'm a little bit bearish on tech, not so much in Apple.

In the very near term, I think Apple actually pops, if you will, to the all-time high, which is exactly what this trade is set up for.

This is the OC 23 expiration. This is going fairly short duration before the next earning cycle, right? O 23. I'm going to buy the 345 calls. Buy the 345 calls, sell the 350 calls against them.

This trade is done for a dollar debit. Out of the money spread, looking for the pop to the upside. Apple into new highs based on gamma squeeze.

All right, Rick. So, as we look at Apple here, are you also seeing the possibility that we could add some more fuel to this rally? Yes, but first of all, Claude and Siri do not even belong in the same sentence. I feel like I just have to kind of say that.

Um but we can see 345 old highs here uh is where uh Don seems to be discussing this uh this area in question. Uh we can see though that our upward channel type shape is still in play.

Uh we have a uh uh downward trend that has been established recently but it seems to be uh holding on to this supportive area that is our trend line.

So, a notable horizontal level, an old low here near 330, then became a high point and then became support. We did make intraday lows beyond that point, but our close happened right around that level.

The closing prices are typically more important than the intraday fluctuations. Same deal up here around the low 340s is where we had our best closes despite the intraday pushes up to above 345.

So those are some of the relevant areas in the near term that traders uh could have their eye on for that that gamma squeeze breakout type of activity.

So RSI, we did have this compression into this triangular shape here kind of just bouncing around slightly above the 50 midline here. Not really a clear short-term direction right at this time here.

Uh we do see as well that the moving averages that are closest to our current activity, our 5day and our 21day price is uh roughly between them right now between 330 to 333 or so.

So look for that to to resolve itself if price does make a significant push above either of those boundaries.

So finally our volume profile study shows that here 328 to 336 is the closest concentration of trading volume and then 308 to 314 is a more significant level as well. So if we do start to pull back we can see that that could be a supportive area.

It lines up with these these old highs. You can often see that these uh uh volume profile nodes will line up with significant old highs or lows or also uh long periods of rangebound activity.

All right, and as we look at Apple again, having a move to the upside again today. A nice positive day. We're up a third of a percent.