NEW BEARISH Plays

Fastenal Co. - FAST - close: 44.04 change: +0.02

Stop Loss: 45.01
Target(s): 40.25
Current Gain/Loss: unopened

Entry on August -- at $--.--
Listed on August 28, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.5 million
New Positions: Yes, see below

Company Description

Why We Like It:
FAST is in the industrial goods sector. The company provides industrial and construction supplies. The early 2012 peak was an all-time high. FAST then set lower highs with a bearish double top in the 2013 February and May peaks. FAST is currently on a new bearish move lower following the early August peak. If you look at FAST and its rivals they all reversed lower after peaking in early August.

The stock tried to produce an oversold bounce from support near $40.00 but it failed near its 10-dma. FAST looks poised to break down even further and the next level of support should be the $40.00 area. Yesterday's low was $43.75. I am suggesting a trigger to open bearish positions at $43.70. If triggered our target is $40.25. More aggressive traders may want to aim lower. The Point & Figure chart for FAST is bearish with a $37 target.

Trigger @ 43.70

Suggested Position: short FAST stock @ (trigger)

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

buy the Oct $40 PUT (FAST1319v40) current ask $0.55

Annotated chart: