NEW BEARISH Plays

Cabot Corp. - CBT - close: 35.26 change: -0.21

Stop Loss: 35.85
Target(s): 31.50
Current Gain/Loss: unopened

Entry on August xx at $ xx.xx
Listed on August 28, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 338 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
CBT is a specialty chemical company. The stock has been sinking under a bearish trend of lower highs for weeks. Now CBT is facing significant support at the $35.00 level. A breakdown could spark a much bigger sell-off.

I am suggesting a trigger to launch bearish positions at $34.85. If triggered we'll start with a stop loss at $35.85. Our multi-week target is $31.50. The Point & Figure chart for CBT is bearish with a $25.00 target.

FYI: CBT will begin trading ex-dividend on August 29th. The quarterly cash dividend should be 20 cents so we can expect CBT to gap down at the open on August 29th by 20 cents.

Trigger @ 34.85

Suggested Position: short CBT stock @ (trigger)

- (or for more adventurous traders, try this option) -

buy the Oct $35 PUT (CBT1220v35) current ask $1.90

Annotated chart: