NEW BEARISH Plays

Electronic Arts - EA - close: 19.67 change: -0.86

Stop Loss: 21.05
Target(s): 18.00
Current Gain/Loss: + 0.0%
Time Frame: up to the earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of video game giant EA continue to underperform. The stock's bounce attempt recently failed at the top of what appears to be a bearish channel. Friday's underperformance and breakdown to new lows under what should have been support near $20.00 looks like a new entry point.

I am suggesting small bearish positions on Monday morning with a stop loss at $21.05. If EA cooperates and sees some follow through lower then we'll want to tighten our stops. Our exit target is $18.00 but we may adjust it as the play progresses. Please note that we want to exit prior to the early February earnings report (still unconfirmed).

(Small Positions)

Suggested Position: short EA stock @ the open

- or -

buy the 2012Jan $20 PUT (EA1221M20) current ask $0.85

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 4.9 million
Listed on January 07, 2011


Jos. A Bank Clothiers - JOSB - close: 46.47 change: -0.66

Stop Loss: 48.55
Target(s): 41.00
Current Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Last week saw several retailers report their December same-store sales numbers. JOSB was not one of them. While the sales data we did hear was mixed investors seemed to be in a sell-the-news mood overall. JOSB hit new relative lows on Thursday and continued to drop on Friday. Last week saw a breakdown in JOSGB below support in the $47.00 area.

I suspect the path of least resistance is down and I'm not the only one. The most recent data listed short interest at 19% of the small 27.5 million-share float. This high amount of short interest does raise the risk of a short squeeze should the stock suddenly reverse unexpectedly.

I am suggesting small bearish positions at the open on Monday morning with a stop loss at $48.55, which is above last Wednesday's high. Our target is $41.00 but don't be surprised to see a temporary bounce near $44.00. FYI: The Point & Figure chart for JOSB is bearish with a $39.00 target.

(Small Positions)

Suggested Position: short JOSB stock @ the open

- or -

buy the Feb. $45 PUT (JOSB1218N45) current ask $1.65

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 03/29/12 (unconfirmed)
Average Daily Volume = 236 thousand
Listed on January 07, 2011