Editor's Note:

In addition to tonight's new play this stock caught my eye and might offer an opportunity.

AUQ is a gold mining stock. What I find interesting is how shares of AUQ have built a very large, bearish head-and-shoulders pattern over the last several months. Recent action appears to have broken the neckline. Thus AUQ is flashing a sell signal. I would be concerned that the stock is volatile.

-James


NEW BEARISH Plays

Electronic Arts - ERTS - close: 20.86 change: -0.82

Stop Loss: 22.05
Target(s): 18.05
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ERTS underperformed the market with a -3.7% decline today. Shares have actually been underperforming for a few days now. The stock has already broken a trendline of higher lows dating back to the August lows. Traders could open bearish positions now. I want to see shares produce some follow through on today's drop.

Chart readers will note that the rally attempt this morning failed at the $22.00 level near its simple 200-dma. I am suggesting a stop loss at $22.05. We'll use a trigger at $20.65 to open bearish positions. Our multi-week target is $18.05. I would expect possible support at $20.00 and $19.00. This trade is going to take some patience. Let's keep our position size small.

Trigger @ 20.65 (small positions)

Suggested Position: short ERTS stock @ 20.65

- or -

buy the 2012Jan $20 PUT (ERTS1221M20) ask $0.98

Annotated chart:

Entry on December xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on December 13, 2011