Editor's Note:

In addition to tonight's new candidates there were plenty of stocks that look like bearish candidates. We did not have room for all of them. If you're looking for bearish trades then take a look at these symbols:

UWM, DIG, XLNX, KMX, UYM, DVN, DIS, ALL, CPO, ITRI, NFX, R, and ETN.

-James


NEW BEARISH Plays

Avon Products Inc. - AVP - close: 19.61 change: -0.84

Stop Loss: 21.11
Target(s): 17.75, 15.50
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
AVP spent about six weeks trading sideways before finally breaking down to new two-year lows. Now the oversold bounce has failed at resistance and shares look poised to begin a new leg lower. AVP certainly underperformed the market today and closed near its lows for the session.

I am suggesting new bearish positions immediately with a stop loss at $21.11. Yesterday's high was $20.96. Our targets are $17.75 and $15.50. Readers may want to consider the November puts instead of Octobers. FYI: The Point & Figure chart for AVP is bearish with a $7.00 target.

Suggested Position: short the stock @ the open

- or -

buy the OCT $20 PUT (AVP1122V20) current ask $1.05

Annotated chart:

Entry on September 29 at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 3.9 million
Listed on September 28, 2011


Phillip Morris Intl. - PM - close: 63.38 change: -1.33

Stop Loss: 66.05
Target(s): 60.25, 57.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PM is a defensive stock that is not working. Normally you might think that a high-dividend stock (yielding more than 4%) on a company with an recession-proof product would do well. Yet PM is breaking down. Not only has PM broken down to new lows under support near $64 but it has also broken down under technical support at the 200-dma. Plus, you could argue the stock has created a big head-and-shoulders (bearish top) pattern over the last few months.

I am suggesting bearish positions now. We'll use a stop loss at $66.05. Our first target is $60.25. Our secondary target is $57.50.
FYI: The Point & Figure chart for PM is bullish with a $57 target.

Suggested Position: short PM stock @ the open

- or -

buy the NOV $60 PUT (PM1119W60) current as $1.74

Annotated chart:

Entry on September 29 at $ xx.xx
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 10.9 million
Listed on September 28, 2011