NEW DIRECTIONAL PUT PLAYS

Hartford Fin. Serv. Group - HIG - close 23.74 change +0.21 stop 24.70

Company Description:
The Hartford Financial Services Group, Inc. (The Hartford) is an insurance and financial services company. It provides investment products, individual life, group life and group disability insurance products, and property and casualty insurance products in the United States. The Hartford is organized into two operations: Life, and Property and Casualty.

Target(s): 22.40, 22.05
Key Support/Resistance Areas: 24.60, 23.70, 22.85, 22.25, 21.85
Time Frame: 1 to 2 weeks

Why We Like It:
We are adding a short candidate to the portfolio to balance our positions a bit. The rally in HIG off of the August lows has failed at the 200-day SMA and I believe there is more downside to come. The stock is finding support at its 20-day SMA and I suggest we initiate short positions at $23.32 which is below Tuesday's low. Our first target is almost $1 lower near the 50-day SMA and our second target is near the swing low on 9/23. Our initial stop is above the 200-day SMA at $24.70 but it will be adjusted as the trade develops. This has the potential to be a quick trade so have your orders ready or be prepared to protect profits if HIG breaks lower.

Suggested Position: Buy December $22.50 PUT, current ask $1.05

Annotated chart:

Entry on October xx
Earnings: 11/2/2010 (unconfirmed)
Average Daily Volume: 7 million
Listed on October 20, 2010