Editor's Note:

In addition to tonight's new candidates, the following stocks look like bearish trades right now:

MWV, NYX, LUK, X, DD, EXPE, and EMR

If you're looking for more bearish candidates you may want to consider the following:

UWM, MUR, MRO, VLO, MCHP, ATI, ETN, ALL, PCAR, SPLS, HCN, ILMN, ADP, SNA, DIS, L, CA, AKAM

If you're looking for a generic bet on the market then consider shorting the DIA or the SPY.

-James


NEW BEARISH Plays

Research In Motion - RIMM - close: 20.30 change: -0.86

Stop Loss: 22.65
Target(s): 18.25, 16.25
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The big gap down in September was reaction to RIMM's earnings report. Now the oversold bounce has failed at the 10-dma. RIMM has sunk to new multi-year lows. The company is struggling with huge competition from AAPL's iPhone and GOOG's Android phones. Now there are bearish rumors circling that the company's Playbook tablet PC could be shut down as the company considers exiting the tablet market. There are dozens of new tablet PCs hitting the market but no one seems to be able to compete with AAPL's iPad.

I am suggesting bearish positions now. We'll use a stop loss at $22.65. More conservative traders could tighten that stop. It's possible that the $20.00 level is round-number, psychological support but if the market breaks down to new lows then I suspect that RIMM will too.

Our downside targets are $18.25 and $16.25. I would keep our position size small. RIMM is likely to see some volatility.

- Small Positions -

Suggested Position: short RIMM stock @ the open

- or -

buy the OCT $20 PUT (RIMM1122V20) current ask $0.73

Annotated chart:

Entry on October 03 at $ xx.xx
Earnings Date 12/15/11 (unconfirmed)
Average Daily Volume = 27.7 million
Listed on October 01, 2011


Vulcan Materials Co. - VMC - close: 27.56 change: -1.39

Stop Loss: 30.25
Target(s): 25.25, 23.00
Current Gain/Loss: +0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Nearly everything related to materials and industrials has been hammered lower. Investors are exiting stocks that might be hit hardest by a recession. VMC has now fallen to multi-year lows. Helping fuel the move was a downgraded. A few days ago S&P's rating service downgraded its outlook on VMC from stable to negative on worries that demand will be sluggish going forward. This puts VMC's "BB" credit rating at risk.

I am suggesting small bearish positions now. I'm a little concerned that VMC might be short-term oversold here. Patient traders may want to wait for a bounce back and/or failed rally under the $30.00 level before initiating positions. We'll start this trade with a stop loss at $30.25. Our targets are $25.25 and $23.00. The Point & Figure chart for VMC is bearish with a $20 target.

FYI: Investors should note that the most recent data did list short interest at 19% of the 128 million share float. That is pretty high interest and raises the risk of a short squeeze if the market bounces.

- small positions -

Suggested Position: Short VMC stock @ the open

- or -

buy the OCT $26 PUT (VMC1122V26) current ask $1.45

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 10/31/11 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on October 01, 2011


Xilinx Inc. - XLNX - close: 27.44 change: -0.92

Stop Loss: 29.55
Target(s): 25.20, 23.00
Current Gain/Loss: +0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
It looks like the semiconductor sector is starting to break down. Micron (MU) missed its earnings number this past week. ALTR recently warned. XLNX cut its revenue forecast for the third quarter. Technically the group looks pretty ugly as well.

I am suggesting bearish positions now. As an alternative you could wait for another bounce near the 10-dma instead. We'll use a stop loss at $29.55. More conservative traders may want to use a stop closer to the 10-dma instead. Aggressive traders will want their stop above $30.00. Our targets are $25.20 and $23.00. FYI: The Point & Figure chart for XLNX is bearish with a $20 target. The bear-flag pattern on the daily chart would suggest a downside target near $23.

Suggested Position: short XLNX stock @ the open

- or -

buy the OCT $27 PUT (XLNX1122V27) current ask $1.00

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 10/19/11 (confirmed)
Average Daily Volume = 5.1 million
Listed on October 01, 2011