NEW BEARISH Plays

EastGroup Properties - EGP - close: 37.74 change: -0.84 stop: 39.55

Company Description:
EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the acquisition, development and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona and California. Its strategy for growth is based on its property portfolio orientation toward premier business distribution facilities clustered near major transportation features. EastGroup's portfolio currently includes 28.1 million square feet. (source: company press release or website)

Why We Like It:
The rally in REIT stocks is reversing. Investors have already begun to do some profit taking. In EGP's case this looks like a new lower high and a bull-trap pattern with last week's failed rally. The high was $39.44. I'm suggesting bearish positions now with a stop at $39.55. There is a handful of moving averages all converging near the $37 level so I would not be surprised to see EGP bounce near this area but any bounce should be temporary with the sector already beginning to correct. I would consider this trade somewhat aggressive since the most recent data listed short interest around 5% of the very small 25.8 million-share float. That's about eight days worth of short interest. Our target is the $34.00 level.

Suggested Position:(SHORT) EGP stock at $37.74(?)

Annotated chart:

Entry on April 01 at $37.74(?)
Earnings Date 04/28/10 (unconfirmed)
Average Daily Volume: 137 thousand
Listed on March 31st, 2010


MAXIMUS Inc. - MMS - close: 60.93 change: -0.34 stop: 62.11

Company Description:
MAXIMUS is a leading provider of government services worldwide and is devoted to providing health and human services program management and consulting services to its clients. The Company has more than 6,500 employees located in more than 220 offices in the United States, Canada, Australia, the United Kingdom, and Israel. Additionally, MAXIMUS is included in the Russell 2000 Index and the S&P SmallCap 600 Index. (source: company press release or website)

Why We Like It:
Shares of MMS exploded higher after the company reported better than expected earnings back on February 4th and guided earnings higher for the rest of 2010. Yet that was back at $48.00. The rally has stalled and shares have been consolidating sideways in the $60-62 zone for three weeks now. I suspect that MMS will correct before moving higher and we have a very clearly defined entry point and stop loss placement.

I am suggesting a trigger at $59.80 to open bearish positions and we will use a stop loss at $62.11. If triggered our target is $55.25. I do need to label this trade somewhat aggressive since we normally do not trade stocks with average volume under 250K a day.

Trigger for bearish positions at $59.80

Suggested Position: (SHORT) MMS stock at $59.80 (unopened)

Annotated chart:

Entry on April xx at $59.80 (unopened)
Earnings Date 05/06/10 (unconfirmed)
Average Daily Volume: 83 thousand
Listed on March 31st, 2010