NEW BEARISH Plays

Loews Corp. - L - close: 33.50 change: -1.05

Stop Loss: 35.15
Target(s): 30.50
Current Gain/Loss: +0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Loews Corporation (L) is a massive holding company. They have significant ownership stakes in CNA Financial (CNA), Diamond Offshore (DO), Boardwalk Pipeline Partners (BWP), and they own 100% of HighMount Exploration and 100% of Loews Hotels.

The stock looks very bearish with a breakdown to new 52-week lows today. Shares have formed a bear-flag pattern that points toward $30, which coincides with its 2010 lows. I am suggesting bearish positions now. We'll use a stop loss above the 10-dma at $35.15. Our target is $30.50. More aggressive traders could aim a little lower. The Point & Figure chart for L is bearish with a $23 target.

NOTE: Don't go overboard on the Oct. $30 puts just because they look cheap.

Suggested Position: short L stock @ the open

- or -

buy the OCT $30 PUT (L1122V30) current ask $0.50

Annotated chart:

Entry on October 04 at $ xx.xx
Earnings Date 10/31/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on October 03, 2011