NEW BEARISH Plays

Home Inns & Hotels Management - HMIN - close: 19.85 change: -0.82

Stop Loss: 21.05
Target(s): 18.00 & 15.50
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HMIN runs a chain of hotels in China. From the looks of the long-term chart investors have been negative for a while. HMIN has a significant trend of lower highs. Shares just broke down under support at the $20.00 mark. The next levels of possible support appear to be $18 and $15.

I want to see a little confirmation of this breakdown so we're suggesting a trigger to open bearish positions at $19.60. If triggered we'll aim for $18.00 and then $15.50. Readers may want to keep their position size small or use the options to limit their risk. The most recent data listed short interest at 17% of the 24.2 million share float.

Trigger @ 19.60

Suggested Position: short HMIN stock @ (trigger)

- or -

buy the Aug $20 PUT (HMIN1218T20) current ask $1.85

Annotated chart:

Entry on July xx at $ xx.xx
Earnings Date 08/09/12 (unconfirmed)
Average Daily Volume = 284 thousand
Listed on July 09, 2011


Riverbed Tech. - RVBD - close: 14.40 change: -0.55

Stop Loss: 15.51
Target(s): 12.50
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
RVBD is a networking technology company. The stock has been basing along support near $15.00 for weeks. Unfortunately, the recent consolidation now looks like a bearish head-and-shoulders pattern. The last two days have seen a sharp breakdown lower.

I am suggesting we launch bearish positions at the open tomorrow. We'll use a stop loss at $15.51. Our target is $12.50 but more aggressive traders may want to aim lower.

Suggested Position: short RVBD stock @ (the open)

- or -

buy the Aug $14 PUT (RVBD1218T14) current ask $1.20

Annotated chart:

Entry on July xx at $ xx.xx
Earnings Date 07/24/12 (confirmed)
Average Daily Volume = 3.4 million
Listed on July 09, 2011