In addition to tonight's new play these stocks caught my eye. Consider them potential trading ideas.
BAS - oil service stocks are underperforming. BAS is breaking down under its November lows. It could fall toward the October lows.
BJRI - a breakdown under the $44.00 level might be a bearish entry point.
ESRX - The stock is breaking technical support at the 50-dma and its trendline of higher lows. You could argue it has also formed a bearish head-and-shoulders pattern (with a tilted neckline).
RVBD - this tech stock is also showing relative weakness and has broken down under its November lows.
NEW BEARISH Plays
Vera Bradley, Inc. - VRA - close: 33.17 change: -0.59
Stop Loss: 36.05
Current Gain/Loss: +0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below
Why We Like It:
VRA makes women's apparel. Shares have been struggling with a bearish trend of lower highs and lower lows. VRA underperformed the market today with a -1.7% decline. Before I continue I have to warn you that this is an aggressive, higher-risk trade. The most recent data listed short interest at almost 80% of VRA's very small 19.7 million share float. If there is some sort of unexpected rally in this stock it could spark a short squeeze and stops may not work very well in a fast market environment. I would suggest using put options in a situation like this to limit your risk but the spreads on the January puts are too wide.
I am suggesting very small bearish positions at the open tomorrow morning. We'll use a wide, aggressive stop loss at $36.05. Our target is $27.50 although readers may want to take profits near $30.00 since it could prove to be round-number support. FYI: The Point & Figure chart for VRA is bearish with a $26 target.
(very small positions only!)
Suggested Position: short VRA stock @ the open
12/15/11 this is an aggressive, higher-risk trade.
Entry on December xx at $ xx.xx
Earnings Date 12/07/11
Average Daily Volume = 796 thousand
Listed on December 15, 2011