Note how well our AAPL Stock Replacement Strategy is already doing. We sold our AAPL stock around the $108 level and rotated that cash into an extraordinary call-spread that stands to make 150% so long as AAPL closes at or above $120 by January of 2018. Right now that position is already up about 25%. The stock meanwhile has only traveled a distance of about 7.8% in upside travel. So it's already beating the stock's own performance by nearly 3.2x return. In other words, had you just held the stock from those levels, your AAPL position would only be up about 7.8%. Overall, I'm confident that our January spread will bring some serious cheer as it matures further.
Now on to our March 100/110 Call spread, we sold half this week when AAPL hit the $115 level. We only sold half because not only was it nearing close to full value, but our larger goal is to rotate into a new spread that will be able to achieve more upside. We believe that we'll be able to sell the other half fairly soon here. Let's first acknowledge where AAPL is at currently.
So after pulling back down to a low 40-RSI on the hourly yesterday, the SPY is in the process of retesting its highs up near the $228 level. As a result, Apple has made incremental new highs. But unlike the prior two breakouts in Apple, the upside is now a struggle. You're seeing push and pull now. Apple's negative divergence also continues. Apple made new highs today on much lower momentum. In fact, Apple's hourly RSI did not cross back over the 70-RSI for the first time in this rally on today's highs. That's an indication that the buy-side momentum is waning and that we will see a struggle for a while.
That does not necessarily mean Apple will go down. It just means that we could be in for a sideways period of a few weeks where Apple trades between $115 and $117 a share. We saw two similar consolidation periods for most of September and during the first three weeks of October. I'm expecting something very similar here. That could put some downside pressure on options premiums. Then we can take a look at re-entering after that consolidation period comes near an end.
On the flip side, we have to also acknowledge that the upside targets on AAPL could take this yet still to $120 by as early as next week.
If that happens, then we will for sure be selling the rest of the March $100/110 call spread for around the $9 mark. Right now that spread is trading at $8.20 as of the close of Thursday. If we sell the remaining 50% allocation then we instead of waiting for a pullback we will simply roll that half into a July spread. So essentially that's what is known as a "rollover" where you simultaneously sell with the intent of purchasing the same spread strikes for a farther dated expiration on those strikes. We would then use our remaining cash from the previous sale of our March 100/110 call spread for a pullback of some kind heading into earnings. .