NEW BEARISH Plays

Focus Media Holdings - FMCN - close: 18.75 change: -0.74

Stop Loss: 20.10
Target(s): 15.25
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Chinese stocks continue to underperform. Shares of FMCN have seen a dramatic reversal in recent days. Now it's flirting with a breakdown to new 2012 lows. If shares trade under $18.50 it will create a brand new point and figure chart sell signal.

Last week's low was $18.56. I am suggesting a trigger to open bearish positions at $18.40. Readers will want to consider limiting the size of their positions since FMCN can be such a volatile stock (or just use the options to limit how much capital you have exposed).

We will aim for $15.25.

Trigger @ 18.40

Suggested Position: short FMCN stock @ (trigger)

- or -

buy the Aug $18 PUT (FMCN1218T18) current ask $1.20

Annotated chart:

Entry on July xx at $ xx.xx
Earnings Date 05/29/12
Average Daily Volume = 2.2 million
Listed on July 16, 2011