NEW BEARISH Plays

Meritage Homes Corp. - MTH - close: 39.29 change: -0.43

Stop Loss: 40.25
Target(s): 35.25
Current Gain/Loss: unopened

Entry on August -- at $--.--
Listed on August 27, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 691 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
Wall Street is worried that rising mortgage rates may have killed the housing rebound. The up trend in the homebuilders looks broken, especially in shares of MTH. If you look closely MTH has created a bearish head-and-shoulders pattern over the last several months. More recently MTH has been consolidating sideways with a bearish trend of lower highs. The stock looks poised to breakdown to new lows.

We are suggesting a trigger to launch bearish positions at $38.40. If triggered our multi-week target is $35.25. FYI: The Point & Figure chart for MTH is bearish with a $31.00 target.

Trigger @ 38.40

Suggested Position: short MTH stock @ (trigger)

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

Buy the Oct $35 PUT (MTH1319v35) current ask $1.00

Annotated chart:

Weekly chart: