NEW BEARISH Plays

ChipMOS Tech. - IMOS - close: 13.21 change: -0.38

Stop Loss: 14.35
Target(s): 11.50
Current Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The bloom has fallen off the rose for IMOS, which saw an incredible Q1 rally from $5.00 to nearly $19.00. The stock has seen a -30% correction lower in the last three weeks. Some consider shares of IMOS very undervalued with a P/E less than 8 but a cheap stock can always get cheaper.

I am suggesting small bearish positions with a stop loss at $14.35, which is just above the simple 10-dma. Our target is $11.50. FYI: The Point & Figure chart for IMOS is bearish with a $8.00 target.

(small positions)

Suggested Position: short IMOS stock @ (the open)

- or -

buy the May $12.50 PUT (IMOS1219Q12.5) current ask $0.95

Annotated chart:

Entry on April xx at $ xx.xx
Earnings Date 05/14/12 (unconfirmed)
Average Daily Volume = 356 thousand
Listed on April 21, 2011


Blue Nile Inc. - NILE - close: 29.82 change: -0.16

Stop Loss: 32.51
Target(s): 26.00
Current Gain/Loss: + 0.0%
Time Frame: exit prior to the early May earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
NILE is an online jewelry retailer. The stock has been underperforming the market for weeks. This past month saw NILE's oversold bounce fail at technical resistance near the 30-dma. Shares look poised to renew the march lower.

I am suggesting small bearish positions at the open on Monday. We do want to keep our position size small to limit our risk because the most recent data listed short interest at 31% of the very small 13.7 million share float. That does raise the risk of a short squeeze. You may want to use options to limit your risk. Our exit target is $26.00 but we do not want to hold over the early May earnings report (date not confirmed yet). FYI: The Point & Figure chart for NILE is bearish with a $23.00 target.

(small positions)

Suggested Position: short NILE stock @ (the open)

- or -

buy the May $30 PUT (NILE1219Q30) current ask $2.40

Annotated chart:

Entry on April xx at $ xx.xx
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 246 thousand
Listed on April 21, 2011


St. Jude Medical - STJ - close: 38.02 change: -0.31

Stop Loss: 39.05
Target(s): 34.25
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
This medical device maker reported earnings on April 18th. The company beat the bottom line estimate by 3 cents but management guided lower for the second quarter. Naturally shares dropped on the warning. The stock is about to breakdown under support near $38.00.

Last week's low was $37.73. I am suggesting a trigger to open bearish positions at $37.45. Our target is $34.25. FYI: The Point & Figure chart for STJ is bearish with a $31.00 target.

Trigger @ $37.45

Suggested Position: short STJ stock @ (trigger)

- or -

buy the May $37.50 PUT (STJ1219Q37.5) current ask $1.05

Annotated chart:

Entry on April xx at $ xx.xx
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 5.1 million
Listed on April 21, 2011