NEW BEARISH Plays

PACCAR Inc. - PCAR - close: 38.74 change: -1.03

Stop Loss: 40.55
Target(s): 32.50
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 PCAR is falling back into a bearish pattern of lower highs and lower lows. Shares just saw their oversold bounce stall and now PCAR is breaking down through all its key moving averages. If the EU summit tomorrow disappoints then stocks are likely to accelerate lower.

I am suggesting small bearish positions tomorrow morning with a stop loss at $40.55. More conservative traders could lower their stop closer to $40.00 while more aggressive traders could place their stop above $41.30 instead. There is possible support near $36.75, near its November low, but we're aiming for $32.50.

NOTE: Readers may want to use the put options to limit your risk just in case the Europeans deliver good news tomorrow and the market rallies.

(Small Positions)

Suggested Position: short PCAR stock @ the open

- or -

buy the 2012Jan $36 PUT (PCAR1221M36) ask $1.15

Annotated chart:

Entry on December xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on December 08, 2011