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Is this a reversal?

HAVING TROUBLE PRINTING?
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None IWM None
  LMT  
  PTR  
     
     

_____ NEW DIRECTIONAL PUT PLAYS _____

Play Editor's Note: The late-day sell-off in stocks only confirms that we're still stuck in a downtrend. I'd love for the market to find a bottom but it looks like stocks may have to retest their lows again. At the very least I would expect a 50% retracement of the bounce.

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iShares Russell 2000 - IWM - close: 48.70 chg: +0.25 stop: 50.75

Why We Like It:
I know that most investors are hoping we've hit bottom and maybe the market has. However, today's failed rally pattern confirms that the trend is still down. This play is a bet that we retest the recent lows. We're suggesting a stop loss above today's high. Our target is $45.05. Aggressive traders might want to contemplate a secondary target under $45.00.

Suggested Options:
We're suggesting the November puts.

BUY PUT NOV 50.00 IWM-WX open interest=35217 current ask $4.15
BUY PUT NOV 47.00 IWM-WU open interest=19940 current ask $2.84
BUY PUT NOV 45.00 IWM-WS open interest=23187 current ask $2.14

Annotated Chart:
IWM

Picked on October 29 at $ 48.70
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 6.1 million

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Lockheed Martin - LMT - close: 78.61 change: -1.67 stop: 82.55

Why We Like It:
It's a similar story in LMT. The stock was crushed during the market sell-off but the oversold bounce is failing at resistance. We're suggesting short-term put plays with a tight stop over today's high. Our target is the $74.00-73.00 zone.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 80.00 LMT-WP open interest= 753 current ask $5.80
BUY PUT NOV 75.00 LMT-WO open interest= 146 current ask $3.60

Annotated Chart:
LMT

Picked on October 29 at $ 78.61
Change since picked: + 0.00
Earnings Date 10/21/08 (confirmed)
Average Daily Volume = 3.8 million

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PetroChina - PTR - close: 67.85 change: +2.93 stop: 71.25

Why We Like It:
Chinese oil giant PTR is showing a similar bearish pattern. The oversold bounce struggled with resistance and rolled over this afternoon. We're suggesting put positions with a stop above today's high. However, if crude oil is trading above $67.00 tomorrow morning before the market open I would not open this play. Our target is the $60.50 mark. More aggressive traders could aim for the $57.50 region.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 70.00 PWK-WN open interest= 283 current ask $8.60
BUY PUT NOV 65.00 PWK-WM open interest= 207 current ask $6.20
BUY PUT NOV 60.00 PWK-WL open interest= 481 current ask $4.50

Annotated Chart:
PTR

Picked on October 29 at $ 67.85
Change since picked: + 0.00
Earnings Date 03/06/09 (unconfirmed)
Average Daily Volume = 1.0 million

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