NEW BEARISH Plays

St. Jude Medical - STJ - close: 51.68 change: -0.29

Stop Loss: 54.20
Target(s): 47.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Long-term I suspect that STJ could end up being a great bullish investment. With 70 million baby boomers getting older there is going to be a growing demand for STJ's medical devices. On a short-term basis the rally has stalled at long-term resistance near $54.00. More aggressive traders could open bearish positions now. I want to see STJ breakdown under its 50-dma first so I'm listing a trigger to open positions at $51.00. Our first target is $47.00.

I would keep our position size small (about half or less than a normal trade) to limit our risk.

Trigger @ 51.00 (Small Positions)

Suggested Position: Short STJ stock @ 51.00

- or -

buy the June $50 PUT (SJT1118R50) current ask $0.95

Annotated chart:

Entry on May x at $xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 2.6 million
Listed on May 16th, 2011