Hi everyone, welcome back!
Markets are constantly going higher and higher each week, but I think it’s a good opportunity to go short now. Risk reward favors a move to the downside, and I will short TSLA and AAPL tomorrow and hedge by going long QQQ.
My AAPL short target is ~325 and short target for TSLA is 900-1000. These will probably be holds for at least 3 – 6 months. My stop loss will be at about 560 for AAPL (risk $60 per share) and 2600 for TSLA (risk $400 per share).
Of course, since these two stocks will have their prices lowered due to the stock split, these numbers will be adjusted accordingly. Overall, I plan to risk no more than 4% of my total account on these two positions. I am also thinking about turning the position into a covered short if specific scenarios arise.
Weekly charts of AAPL and TSLA below:
Of course, my maximum loss will be based off of my hedge with QQQ. For example, if TSLA drops 20%, but my hedged QQQ (the ETF I go long) drops 40%, I will be be stopped out because I lost 20% (~400 stop loss / 2200 entry).
To summarize, I’m risking no more than 4% of my entire account on this trade in an attempt to make 12%. The trade profits when TSLA and AAPL underperform QQQ, and loses when TSLA and AAPL continue to outperform the QQQ.
Enjoy your week, and I hope all is well!