NEW BEARISH Plays

HNSI, Inc - HNSI - close 26.58 change -1.49 stop 29.11

Company Description:
HSN, Inc. (HSNi) is an interactive multi-channel retailer offering retail experiences on television (TV), online, in catalogs and in retail and outlet stores through its two operating segments, HSN and Cornerstone. HSN is a retailer and interactive lifestyle network offering an assortment of products through television home shopping programming on the HSN television network and through its business-to-consumer Internet commerce site HSN.com. Cornerstone comprises home and lifestyle brands, including Frontgate, Ballard Designs, Garnet Hill, Smith+Noble, The Territory Ahead, TravelSmith and Improvements. Cornerstone distributes over 200 million catalogs annually, operates seven separate Internet sites, and operates 23 retail and outlet stores.

Target(s): 25.05, 23.50, 22.25
Key Support/Resistance Areas: 28.90, 27.25, 25.80, 200-SMA, 23.50, 22.00
Time Frame: 1 to 2 weeks

Comments:
Retailers are weak and HSNI looks like it is headed to test its 200-day SMA and possibly its recent swing lows. The stock has made a great comeback off of its 2009 lows but the selling has picked back up in recent weeks. The stock lost -5.3% today on strong volume and I expect it to continue if the broader market cooperates. I would like to see a retracement of some of today's gains to initiate short positions but if the stock breaks down I also suggest initiating short positions. Let's use triggers on a bounce to $27.20 or a breakdown to $25.69. More nimble traders can initiate positions now. We'll keep a tight stop at $29.11 which is above the downtrend line and Monday's high. If we get filled at $27.20 our first target is nearly 8% lower and above the 200-day SMA. HSNI closed below its 20, 50, and 100 day SMA's today.

Suggested Position: Short HSNI stock, if it trades to $27.20 or $25.69

Options Traders: Buy September $25.00 PUTS, current ask $1.65

Annotated chart:

Entry on August xx
Earnings: 11/11/2010 (unconfirmed)
Average Daily Volume: 495,000
Listed on August24, 2010