NEW BEARISH Plays

Johnson Controls Inc. - JCI - close: 44.49 change: -1.28

Stop Loss: 45.75
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 26, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 3.5 million
New Positions: Yes, see below

Company Description

Why We Like It:
JCI is in the consumer goods sector. The company makes auto parts. The stock delivered a stellar performance from late 2012 through the end of 2013, more than doubling in value. The highs set in January this year were all-time highs. Since then momentum has changed.

The pace of car sales seems to be slowing. Ford (F) just delivered a disappointing earnings report. JCI reported on April 23rd and missed the revenue estimate and guided lower for 2014.

Technically the stock looks broken and the breakdown below its 200-dma is bearish. The February low was $43.85. I am suggesting a trigger to open bearish positions at $43.75.

FYI: The Point & Figure chart for JCI is bearish with a $40.00 target.

Trigger @ 43.75

Suggested Position: short JCI stock @ (trigger)

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

Buy the Jul $40 PUT (JCI1419S40) current ask $0.60

Annotated chart:

Weekly chart:



Youku Tudou Inc. - YOKU - close: 24.14 change: -0.31

Stop Loss: 25.05
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 26, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.1 million
New Positions: Yes, see below

Company Description

Why We Like It:
YOKU is considered part of the technology sector. The company operates an Internet television company in China. It has been a volatile year for YOKU's stock. Worries about growing competition sparked a few "sell" downgrades in February. That big spike in the stock in late February and early March was on YOKU's better than expected earnings. Unfortunately, after hitting new highs, YOKU reversed sharply.

News on March 26th that Tencent, China's biggest Internet company, was going to invest $300 million for a 20% stake in YOKU did not have much impact on YOKU's stock. Then news that YOKU had signed a licensing deal with Disney (DIS) to market the new Captain America movie didn't seem to do much for the stock.

YOKU has spent the last two weeks churning sideways in the $24-27 zone. Now they look poised to breakdown into a new leg lower. I would consider this an aggressive trade because YOKU can be a volatile stock and the most recent data listed short interest at 8% of the 80.6 million share float.

The April lows have been $23.62 and $23.57. I am suggesting a trigger to open bearish positions at $23.45. We're not setting a bearish target yet but the P&F chart is very bearish and forecasting at $10 target.

Trigger @ 23.45 *small positions*

Suggested Position: short YOKU stock @ (trigger)

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

Buy the Jun $20 PUT (YOKU1421R20) current ask $1.00

Annotated chart: