NEW BEARISH Plays

Navistar Intl. - NAV - close: 20.58 change: -1.08

Stop Loss: 21.25
Target(s): 16.00
Current Gain/Loss: unopened

Entry on October xx at $ xx.xx
Listed on October 16, 2012
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.6 million
New Positions: Yes, see below

Company Description

Why We Like It:
NAV manufactures commercial trucks, engines, RVs, and other large vehicles and parts. Unfortunately for shareholders the stock has been trending lower with a bearish pattern of lower highs all year. Now this trend is about to produce a bearish breakdown under major support at the $20.00 level.

The September low was near $19.80. I am suggesting a trigger to open bearish positions at $19.75. The 2008 lows were near $15.50 so we're going to target a drop to $16.00. FYI: There is already a growing amount of bearish pressure on the stock with the most recent data listing short interest at 15% of the 47.4 million share float.

Trigger @ 19.75

Suggested Position: short NAV stock @ (trigger)

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

buy the NOV $20 PUT (NAV1217w20) current ask $1.30

Annotated chart: