NEW BEARISH Plays

Acme Packet, Inc. - APKT - close: 20.33 change: -0.87

Stop Loss: 21.05
Target(s): 17.00
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
APKT provides network delivery services for voice, video and data. Unfortunately for shareholders the stock appears to be in a long-term downtrend that mirrors the impressive up trend from 2010. The market's recent weakness has pushed APKT to round-number support at the $20.00 mark.

I am suggesting we use a trigger to open bearish positions at $19.90. If triggered we'll aim for a drop to $17.00. More aggressive traders could aim lower since the Point & Figure chart for APKT is bearish with a $13.00 target. However, we want to make sure and keep our position size small since being short APKT is a popular position. The most recent data listed short interest at 18.7% of the 58.2 million share float.

Trigger @ 19.90 *Small Positions*

Suggested Position: short APKT stock @ (trigger)

- or -

buy the Jul $20 PUT (APKT1221S20) current ask $1.20

Annotated chart:

Entry on June xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on June 21, 2011