Trading Apple's Earnings Gaps

Apple had another blow out quarter.  People rushed in but that doesn't mean this as an easy trade.
Consider last quarter. Last quarter, I bought immediately after the earnings in A.H. at 100, but the action seemed very tepid so I sold for just a small gain. 

Many people were then commenting on how AAPL was not acting right for having such great earnings and the next day, AAPL endured a harsh fade.  
While that might have  suggested a gap fill,  AAPL would go on to run straight to 119 from this point. in a month and a half. 

 This current quarter, we again saw the Day 1 fade. Day 2 was then what expected but then the long wick day 3.


 Does it then begin to trend from this point like it did last quarter or does it try to fill the gap? It's all conjecture and pointless unless we have a plan. Let's consider the possible scenarios and make a game plan.

• Scenario 1:  let's first  assume this is a just a minor shakeout and that AAP L will resume a trend like it did last quarter.  With that assumption, I believe the buy point is Thursday's close of  18.90, with a stop at 115.50.

• Scenario 2: Let's assume  that Friday's pull back is something more and that the market needs to digest all the selling.  Under this scenario, I want to see a test of the earning's gap.  If AAPL can get into the the gap but then reverse and turn green,  I would enter the the trade setting a stop at the low for the day.

• Scenario 3:, Let's assume we have an inside day followed by a number of narrow range days from this point.  I would then wait for 2-3 weeks for the action to quiet and then look for a momo-burst set up.

For example, in the beginning of November AAPL put in a week of very narrow range days but on November 11, it expanded its range and closed at the high. There's the entry with a stop at 108.  The next day saw continuation closing up +1.55

• Scenario 4: What if apple does something not in the first 3 scenarios?  If a stock is not setup to provide a trade according to my playbook, I let it go. 

With the game plan set, we are now prepared.  Have fun