Play Editor's Note:
No new plays tonight but I am providing a watch list of potential bearish plays.
WFC $13.69 - This bank stock is testing its January 2009 lows. I would consider bearish positions under $13.40 and target the $10.50-10.00 zone where it should meet its trendline of lower lows from last October.
TGT $29.63 - Today's move looks like a bearish entry point or you could wait for another failed rally near $32.00. I'd consider a stop loss just above $32.00. Target the November 2008 lows.
FSLR $133.63 - This stock has broken several layers of support with today's drop. Consider new positions now or on a bounce back toward $140-145. Stop loss placement is the challenge given the stock's volatility. I would aim for the $112.00 level and maybe a secondary target at $101.
LLL $75.71 - More aggressive traders may want to consider put positions now on this defense contractor. I would prefer to wait for a new relative low under $74.30 or a new failed rally in the $77.50-78.00 zone. Consider a target near $70.00 and maybe a target near $66.
ATK $78.62 - This is another defense stock that looks poised to begin a new leg lower. Consider positions on a new relative low or another failed rally near the 100-dma.
AZO $131.74 - This auto parts supplier saw its rally fail near the trendline of higher highs around $145. Now shares are breaking multiple levels of support. The challenge is stop loss placement. I'd probably put a stop around $141. The question is do you buy puts now or wait for a bounce back into the $135-140 zone. My first target would be the $120 region.
BCR $86.83 - This medical device company came out with some good news on a pre-approval by the FDA for a new product. Yet the news failed to have much of an impact. The afternoon rally failed near resistance around $88.00. Aggressive traders could buy puts now with a stop loss above $88.25. Otherwise I would wait for a new relative low under $84.00 to initiate positions. Set a target near $80.00 and maybe another target near $76.
PRE $65.42 - The recent consolidation in PRE almost looks like a bear-flag pattern. You could open bearish positions now with a stop loss above Friday's high (68.82) or wait for a new low drop below $64.00 to open positions. My first target would be the $60 level. Consider a secondary target near $56.